Germany contracts in wake of euro crisis

GERMANY may be on the brink of recession after the sovereign debt crisis caused the economy to contract in the final quarter of 2011.

Europe’s largest economy shrank “roughly” 0.25% in the fourth quarter from the third, the Federal Statistics Office in Wiesbaden said yesterday in an unofficial estimate.

Economists such as Christian Schulz at Berenberg Bank expect gross domestic product to contract again in the current quarter. A recession is defined as two consecutive quarters of declining GDP.