Economic growth across the European Union (EU) slowed to an annualized rate of 0.4% in this year’s third quarter amid a growing fiscal crisis in France.
Statistics agency Eurostat said growth in the third quarter declined from 0.6% annualized growth in the year’s second quarter.
Despite the slowdown, the third quarter result was higher than the 0.2% growth that had been forecast among economists who were surveyed by Reuters (TRI).
Much of the Q3 slowdown can be attributed to France, whose economy contracted by 0.1% over the July to September period.
France, which is Europe’s second largest economy after Germany, is in the midst of a debt crisis and struggling to reduce its hefty budget deficit.
The situation has led to widespread political unrest, protests, and riots in the streets of France over cost of living and other issues.
Germany, Europe’s largest economy, grew by 0.2% in the third quarter. Growth in Italy, the European Union’s third-biggest economy, was flat during the summer months.
News of the third quarter economic performance comes days after the European Central Bank (ECV) voted to hold interest rates steady at current levels.
Economists expect the central bank to raise interest rates 25-basis points in December as energy prices continue to rise heading into winter.
In announcing that it was standing pat on interest rates, the European Central Bank said that downside risks to economic growth on the continent had increased.
