European economic slow-down

German economic slowdown raises fresh eurozone fears

• German growth at 0.1% for last quarter

• Eurozone-wide growth at just 0.2%

• Markets fall with FTSE 100 down 73 points

Guardian,Tuesday 16 August 2011 08.38 BST

The German economy has come to a near-standstill in the last quarter as the global slowdown hit Europe's biggest player.

In the latest blow to the eurozone, Germany grew by just 0.1% between April and June. Economists had expected growth of 0.5% during the quarter. Germany's Federal Statistical Office also revised down growth in the first quarter of 2011, to 1.3% from its initial estimate of 1.5%.

With France's economy failing to grow during the quarter, Germany's GDP data shows that the eurozone economy has worsened as its debt crisis entered a new, dangerous phase. The weak performance of the two countries dragged growth across the eurozone down to only 0.2%, Eurostat reported, with the wider European Union also growing by 0.2%.

The German slowdown was blamed on a fall in domestic consumption and construction work during the quarter. There was also a sharp fall in energy production after the government shut down eight nuclear plants in the aftermath of the Fukushima reactor disaster in Japan.

The slowing economy is a blow to Angela Merkel as she prepares to meet the French president Nicolas Sarkozy to discuss the euro debt crisis.

Spanish GDP grew by 0.2% during the quarter, down from 0.3% in the first three months of 2011.

The UK economy also grew by 0.2%, according to preliminary data issued last month.

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