New figures show the Eurozone is heading for another possible recession.

The area saw a 0.2% contraction in the 2nd quarter.

Eurostat says seasonally adjusted gross domestic product (GDP) fell by 0.4% in the Eurozone and by 0.2% in the EU compared to the same period last year.

In the 1st quarter gross domestic product growth stood at zero in both the EU and the group of 17 EU members that use the Euro currency.

The contraction sets the Euro area up for a possible fall into recession which is commonly defined as 2 consecutive quarters of contraction.

The figures reflect the crippling debt crisis that has engulfed the Eurozone forcing EU-IMF bailouts for Ireland, Greece and Portugal and aid for the Spanish banking sector.

However Germany steered clear of the worst of the debt crisis to post better-than-expected growth.

But stagnant numbers will also make it harder for the new French Socialist government to deliver on its pledges to the EU to cut its budget deficit from around 4.5% of GDP this year to the EU limit of 3.0%by the end of 2013.