BRUSSELS, Aug 14 - The euro zone economy stagnated in the second quarter of the year, showing no quarterly growth after a slight expansion of 0.1 percent in the first quarter, EU statistics agency Eurostat said on Thursday. The data, released just after Germany said it fell into recession in the second quarter and after Italy said last week it was in the same position, is Eurostat's first estimate for the period. It was in line with analysts' expectations. On a annual basis, gross domestic product (GDP) was up 0.4 percent after 0.9 percent in Q1.
European policy makers have been struggling with the question of how to get euro zone growth back on track, leading some to call for an easing of the fiscal rules of the European Union's Stability and Growth Pact. Germany and France, the two biggest euro zone economies, have already breached budget deficit limits. The European Central Bank has already cut interest rates and has called on euro zone governments to carry out structural reforms to boost growth. The European Commission expects growth to start picking up later this year. In a forecast released at the same time as Eurostat's data, it said it expected GDP to be 0.0 to 0.4 percent in the third quarter (unchanged from its forecast last month) and 0.2 to 0.6 percent in the final three months of the year.//