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Eurozone Debt Crisis Puts Economy In Standstill

Antiausterity banners hang near the Parthenon Temple in the Greek capital Athens
Official statistics show that the 17-nation eurozone economy shrank by 0.3 percent during the fourth quarter of 2011 -- the first such decline in the zone in more than two years -- as the region's debt crisis continued to impact on growth.

The preliminary figure was announced on February 15 as results showed that the Netherlands and Italy have officially entered recession, which is defined as two consecutive quarters of economic contraction.

France, meanwhile, showed an unexpected gain in economic output.

Germany, Europe’s biggest economy, announced a smaller than anticipated contraction.

Greece Scrambles To Make Cuts

The announcements came as international lenders said they have not yet finalized a crucial bailout program for debt-crippled Greece, which is facing default in March.

Greek finance officials have been scrambling to finalize fresh budget cuts ahead of a eurozone ministers' conference call on a critical international bailout for the debt-plagued country.

Finance Minister Evangelos Venizelos said authorities are near to closing a 325-million-euro ($423-million) hole in the budget, and said President Carolos Papoulias had agreed to give up his presidential salary as part of the effort.

Eurozone ministers were set to meet later on February 15 to discuss the terms of an emergency 130-billion-euro bailout for Greece that is needed to prevent the country from going into default next month -- but the ministers have already warned that they do not believe that Greece has met the necessary conditions yet to receive the bailout.

The eurozone ministers are demanding guarantees from Greek parties on budget reductions.

Compiled from agency reports