Euro economy shrank at end of 2020 under pandemic's weight

The European economy shrank by a smaller than expected 0.7% in the last three months of 2020

Germany Daily Life (Copyright 2021 The Associated Press. All rights reserved)

The European economy shrank by a smaller than expected 0.7% in the last three months of 2020 as businesses in France and Germany weathered a renewed round of anti-COVID-19 lockdowns somewhat better than expected.

That consolation in official figures released Tuesday couldn't erase a gloomier outlook for this year, as the 19 countries that use the euro are expected to lag China and the U.S. in bouncing back from the worst of the pandemic

For the year, the eurozone shrank 6.8%, according to EU statistics agency Eurostat.

The growth figures underscored a rollercoaster year of freakish economic data, with a plunge of 11.7% in the second quarter, the biggest since statistics started in 1995, followed by a rebound of 12.4% in the third quarter in late summer. The winter wave has meant new restrictions on travel, business and activity, but companies in some sectors such as manufacturing have been better able to adjust than services businesses such as hotels and restaurants.

The German economy Europe's biggest, grew by a scant 0.1% while France saw a smaller than expected drop of 1.3%. Overall, economists had expected a drop in the eurozone of as much as 2.5% as recently as mid-January.