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European Economy Suffers Setback


European Economy Suffers Setback
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A new report shows the European Union's economy shrinking more than expected.

Revised figures issued by the EU Wednesday show the 16-nation eurozone's gross domestic product was down by 0.2 percent in the second quarter as compared to the first three months of the year. A contraction of 0.1 percent had been predicted.

The trend was reflected across the 27-nation EU as a whole, where the fall in GDP was 0.3 percent.

To combat a sliding economy, many EU nations have run up budget deficits exceeding the EU's limit of three percent of each country's GDP.

The European Commission declared nine countries to be in violation of the deficit limit Wednesday, including Germany, Italy, and the Netherlands - as well as Austria, Belgium, the Czech Republic, Portugal, Slovakia and Slovenia.

The EU designed the rule to keep the finances of EU nations in line and maintain the stability of the European currency.