News

Growth to between January and March was 0.2%, after being flat in the previous three months.

Compared with the same quarter in 2009, the combined economies of the 16 countries that use the euro grew 0.5%.

Throughout the 27-nation EU as a whole, which includes the UK, the first quarter also showed 0.2% growth.

The figures, from the European Union's statistics office, Eurostat, showed that Greece's economy shrank by 0.8% in first quarter of 2010.

Italy reported the fastest growth, of 0.5%, making up for a 0.1% drop over the previous quarter.

Germany was in line with the average, with 0.2% growth, although this was higher than some analysts forecast.

Spain crawled out of recession with 0.1% growth. France also grew by 0.1%, slowing from 0.5% growth in the previous three months.

The figures for the eurozone and whole EU compared unfavourably to first quarter growth of 0.8% for the US.

Japan has yet to release its data, but it had already recorded growth of 0.9% in the last three months of 2009.

Austerity programmes

However, analyst Howard Archer, of IHS Global Insight, expects the eurozone's improvement to gain momentum.

He said: "The eurozone's upturn is expected to gradually become more firmly established in 2011, when GDP growth is forecast at 1.5%, helped by a stabilisation and then gradual improvement in labour markets as well as by stronger global growth."

But governments' measures to reduce their budget deficits will cast a cloud over Europe, said Carsten Brzeski, economist at ING.

"Austerity programmes in several eurozone countries will weigh on growth in the coming years," he said.

BBC 12.5.2010