The eurozone had avoided returning to recession since the financial crisis following the collapse of U.S. investment bank Lehman Brothers, mainly thanks to the strength of its largest single economy, Germany.
But even that country is now struggling as exports drain in light of the economic problems afflicting large chunks of the eurozone.
Germany's economy grew 0.2 percent in the third quarter, down from a 0.3 percent increase in the previous quarter. Over the past year, Germany's annual growth rate has more than halved to 0.9 percent from 1.9 percent.
Germany's Chancellor, Angela Merkel, tried to strike a positive note when she spoke to reporters in Berlin Thursday."I think we all are working on getting back on our feet again rapidly," she said. "We see that economic growth is slowing, that overall we have a small drop in the eurozone but I'm also very optimistic that if we do our political homework ... we will again have growth after this small decline." Perhaps the most dramatic decline among the eurozone's members was seen in the Netherlands, which has imposed strict austerity measures. Its economy shrank 1.1 percent on the previous quarter. Five eurozone countries are in recession â¿¿ Greece, Spain, Italy, Portugal and Cyprus. Those five are also at the center of Europe's debt crisis and are imposing austerity measures, such as cuts to wages and pensions and increases to taxes, in an attempt to stay afloat. As well as hitting workers' incomes and living standards, these measures have also led to a decline in economic output and a sharp increase in unemployment. Spain and Greece have unemployment rates of over 25 percent. Their young people are faring even worse with every other person out of work. As well as being a cost to governments who have to pay out more for benefits, it carries a huge social and human cost.