International News

PARIS (AP) The recession across the economy of the 17 European Union countries that use the euro extended into its sixth quarter longer than the calamitous slump that hit the region in the financial crisis of 2008-9.

Eurostat, the EU's statistics office, said Wednesday that nine of the 17 eurozone countries are in recession, with France a notable addition to the list. Overall, the euro region's economy contracted 0.2 percent in the January-March period from the previous three months.

Though that's an improvement on the previous quarter's 0.6 percent decline, it's another unwelcome landmark for the single currency bloc as it grapples with a debt crisis which has forced governments to slash spending and raise taxes. These austerity measures have inflicted severe economic pain and social unrest.

Though this recession is not nearly as deep as the one in 2008-9, it is the longest in the history of the euro, which was launched in 1999. A recession is officially defined as two straight quarters of negative growth.

"The eurozone is facing a double blow from necessary restructuring of its domestic economy and somewhat disappointing growth in world trade, in particular demand from emerging markets," said Marie Diron, senior economic adviser to Ernst & Young.

Other major economies have faltered this year but none are in recession. The annualized contraction in the eurozone of around 0.9 percent contrasts with the equivalent expansion of the U.S. of 2.5 percent.

There was also bad news for the wider 27-country EU, which includes non-euro members such as Britain and Poland. It too is now officially in recession after shrinking by a quarterly rate of 0.1 percent in the first quarter, following a 0.5 percent drop in the previous period.

With a population of more than half a billion people, the EU is the world's largest export market. If it remains stuck in reverse, order books for companies in the U.S. and Asia will be hit. Last month, U.S.-based Ford Motor Co. lost $462 million in Europe and called the outlook there "uncertain."

Most economists think the problems afflicting many countries in the eurozone will mean the eurozone will remain in recession into the second quarter, before some growth begins to emerge in the second half of the year.

In its spring economic forecast, the European Union's executive arm, the Commission, predicted that the eurozone will shrink 0.4 percent this year, better than the 0.6 percent contraction in 2012.

The eurozone has been in recession since the fourth quarter of 2011. Initially it was just the countries at the forefront of its debt crisis, such as Greece and Portugal that were contracting.

But the malaise is now spreading to the so-called core countries. Figures Wednesday showed Germany, Europe's largest economy, grew by a less-than-anticipated quarterly rate of 0.1 percent, largely because of a severe winter.

Germany's paltry growth still allowed it to avoid a recession following the previous quarter's 0.7 percent fall, when orders for the country's high-value good from its struggling euro neighbors declined.

However, France, Europe's second-largest economy, has not avoided that fate. On the first anniversary of Francois Hollande becoming president, figures showed that the country's economy contracted by a quarterly rate of 0.2 percent for the second quarter running.

"We are in Europe, the eurozone countries are our main clients and our main suppliers, and when the environment around us is depressed, well, that's the main factor in the slowing of the French economy," French finance minister Pierre Moscovici said.

This marks the third time that France has been in recession since 2008, when a banking crisis pushed the global economy into its deepest contraction since World War II.

Guillaume Cairou, CEO of the consultancy Didaxis and president of France's Club of Entrepreneurs, said the news that the country is in recession merely confirms the difficulties its businesses have long experienced.

"The situation of companies on the ground is grave and more serious today than in 2008," Cairou said in a written statement.

Whatever problems France is experiencing at the moment, they pale in comparison with the continuing contractions in countries that have either been bailed out or are trying to avoid a financial rescue.

GREECE

The country has faced the most acute economic difficulties and it remains mired in a six-year recession that is commonly being referred to as a depression. The Greek economy has been ravaged by a series of austerity measures, such as wage and pension cuts and tax rises, demanded by international creditors in order to return the country's public finances to health.

In the first quarter, the Greek economy was 5.3 percent smaller than it was the year before quarterly figures are not provided. Though that is an improvement compared to the past two quarters in the third quarter of 2012, the annual rate of contraction stood at 6.7 percent Greece remains a long way off posting growth and its unemployment rate stands at over 27 percent.

The country's creditors and the Greek government have recently voiced hopes that the recent calmer financial backdrop may herald a return to growth in the latter part of this year.

CYPRUS

Much worse is projected for Cyprus, which recently accepted a bailout following a damaging crisis that saw its banks close for nearly a couple of weeks. Many economists fear that the small eastern Mediterranean island nation will see its output shrink at Greek-style levels over the coming couple of years as its economy readjusts. Capital controls remain in place, two months after the crisis that gripped the country. In the first quarter, the island's economy shrank by a quarterly rate of 1.3 percent.

PORTUGAL

Portugal, which has also been bailed out, remains in recession, though the quarterly decline of 0.3 percent in the first three months of the year is substantially lower than the previous quarter's 1.8 percent drop.

SPAIN, ITALY, IRELAND

Spain, which has sought help for its banks, remains in recession, as is Italy, which has also embarked on the austerity path. Both countries' economies shrank by a quarterly rate of 0.5 percent in the first quarter. Quarterly figures for Ireland, which hopes to exit its bailout program this year, have yet to be released.

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Pylas contributed from London.