Italy Financial Crisis
Italy Financial Crisis

Europe's 18-nation euro bloc is facing new economic pressure, with its third biggest economy in Italy unexpectedly falling again into a recession.

Italy said Wednesday that its economy contracted two-tenths of one percent in the April-to-June period, on the heels of a first-quarter drop as well. It was the third time Italy has slipped into a recession since 2008.

Meanwhile, Germany, the eurozone's biggest economy, reported that manufacturing orders dropped in June at the fastest pace in nearly three years. Berlin said that geopolitical risk led to a "reticence" in placing factory orders.

Analysts say that political tensions in Europe over Russia's intervention in Ukraine and the newest economic sanctions that Europe and the United States have imposed against Moscow are threatening to stall the weak eurozone economic recovery that began more than a year ago.

The eurozone economy advanced a meager two-tenths of a percent in the first quarter this year. The European Central Bank has been predicting 1 percent growth for all of 2014.

Bank officials are meeting Thursday, but analysts say they are unlikely to approve new policies to boost the eurozone economy while they wait to gauge the effect of stimulus measures they adopted in June.