The euro-area economy shrank in the second quarter after theworsening debt crisis and tougher budget cuts forced at least sixnations into recessions.

Gross domestic product in the 17-nation currency bloc fell 0.2percent from the first quarter, when it stagnated, the EuropeanUnion's statistics office in Luxembourg said today. That's in linewith the median estimate of 35 economists in a Bloomberg survey.The contraction was softened by stronger-than-forecast growth inGermany, the region's largest economy.

Europe's slump is deepening as governments struggle to restoreinvestor confidence and companies eliminate jobs. While Germany'seconomy helped to support the euro region in the first half,surveys are weakening, with a gauge of investor confidence droppingin August. The Bank of Japan today cited the euro turmoil amongrisks to its economy.

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