EUROZONE GROWTH LOWERED TO ZERO

The eurozone's economy failed to grow at all in the last three months of 2009, the British Broadcasting Corporation reported on Wednesday.

The European Union's statistics office said that the quarter-on-quarter growth in the three months to December had proved to be zero.

This was revised down from a previously reported 0.1 per cent, according to Eurostat.

It stated, 'Year-on-year, the economy of the 16 countries using the euro contracted by 2.2 per cent, more than the previously estimated 2.1 per cent.'

At the same time, the chief economist of the Organisation for Economic Co-operation and Development, Pier Carlo Padoan, said economic growth in the developed world was likely to slow down in the first half of 2010.

The OECD predicted that overall; the G7 group of nations would grow at an annualised rate of 1.9 per cent in the first three months of 2010 and 2.3 per cent in the second quarter, as against the 3.7 per cent recorded in the last quarter of 2009.

The annualised rate is the growth rate that would be achieved in a year if growth continued at the same pace seen in the three-month period.

'Economic activity gathered steam in most of the major OECD economies in the last quarter of 2009, with the notable exception of the euro area,' the OECD said.

Mr Padoan said Europe's urgent priority was to reduce levels of government debt that had climbed during the financial crisis. This should happen before interest rates started to rise, he added.

'We would not recommend that countries wait for market pressures to take action. If that happens, it means they're too late,' he said.

He also said that Greece should do this without further help from the rest of Europe.

The debt reductions should start in 2011, 'or earlier where needed', according to the OECD economists.