For the first time since the euro's introduction in 1999, the eurozone's economy contracted and if this happened for another quarter Europe's economy will be officially in recession.

Eurostat figures on economic growth during the second quarter of this year show that the eurozone economy contracted by 0.2 per cent when compared with the first quarter, when the economy had expanded by 0.7 per cent.

This drop cut year-on-year growth to 1.4 per cent; in the first quarter, the annual figure stood at 2.1 per cent. Although Malta is part of the eurozone, its economy is still faring rather well when compared with the large European economies. However, in overall terms, the size of the Maltese economy is insignificant when making comparisons at a eurozone level.

During the period in question, Malta's economy grew by 0.7 per cent, the same as in the first quarter. On a year-on-year basis, by June, Malta's economic growth stood at 3.3 per cent, surpassed only by three other eurozone members, namely Slovenia, Cyprus and Greece.

The dominant economies in the eurozone, including Germany and France, suffered and registered poor growth. The latest gross domestic product (GDP) results continue to add to fears, based on national figures, that the economy of the 15-country eurozone had become less active in the third quarter of the year.

Eurostat said that during the second quarter of 2008, the euro area experienced a drop in household final consumption expenditure of 0.2 per cent, a decrease in investment of one per cent, a reduction in exports of 0.2 per cent and a fall in imports of 0.5 per cent.

Comparable figures indicate that Europe is faring worse than the US, where the economy managed to grow by 0.7 per cent between April and June, but is suffering less than Japan, which saw economic activity fall by 0.7 per cent.