Gross domestic product fell 0.3% in the 17-nation European zone in the fourth quarter, the first contraction since the second quarter of 2009.
“The recent improvement in leading indicators suggests there is a fair chance that the euro-zone economy as a whole might not shrink further in the first quarter,” said Martin van Vliet, an economist at ING Group in Amsterdam, according to Bloomberg.
In Greece, GDP plunged 7% in the fourth quarter as European leaders try to get the troubled country to clean up its fiscal act.
Companies are being affected by the region’s crisis as well. BNP Paribas SA (BNP), France’s largest bank, saw fourth-quarter profits drop 51%, partly as a result of writedowns on Greek sovereign debt. German truck maker MAN SE (MAN) said sales and operating profit will decline in 2012 as the debt crisis discourages companies from investing.