The trend was set by Germany which posted a 2008 fourth-quarter plunge of 2.1 per cent in gross domestic product (GDP), its worst quarterly result in two decades, as exports and business investment buckled under the global crisis.

'The disaster is now official,' commented Deka Bank analyst Andreas Scheuerle.

In Brussels, official data showed the 16-nation euro zone as a whole had shrunk by a record 1.5 per cent in the same period compared to the third quarter, with the 27-nation European Union also in recession for the first time.

Italy revealed its recession had deepened with a new contraction of 1.8 per cent in the final quarter of 2008, while French data confirmed a 1.2 per cent decline in GDP in the same period.

France is the last major European economy not formally in recession, defined as two consecutive quarters of contraction. The economies of Britain and Spain began shrinking in mid-2008.

'Today's data wipes out any illusion that the euro zone is getting off lightly in this global downturn,' commented Mr Jorg Radeke, an economist at the Centre for Economics and Business Research.

In the Netherlands, data showed the Dutch economy in recession after its biggest decline since the beginning of the 1980s in the fourth quarter, while Austria reported a quarterly contraction for the first time in seven years.

In eastern Europe, solid growth rates have withered as western investors pull back and export markets, particularly for cars, have stalled. The Czech Republic and Slovakia still managed to post positive, if paltry, growth figures on Friday.

'The reason (behind the slowdown) is obvious: a slump in exports in reaction to the recession in the euro zone and tighter lending conditions,' Mr David Marek, an analyst with Patria Finance in Prague, told AFP.

The weakest performer in the region was Hungary, which entered recession in the fourth quarter after its economy shrank 1.0 per cent, preliminary data showed.

For Baltic countries, strong growth has flipped into equally rapid contraction, with the economies of Estonia, Latvia and Lithuania in dire straits.

For the 16-nation euro zone, forecasters surveyed by the European Central Bank expect GDP to decline by 1.7 per cent this year.

'One remarkable feature of the fourth quarter data is that those economies considered to be in better financial shape going into this crisis, Germany and Japan, have performed much worse than those economies that appeared more financially vulnerable, the UK and US most notably,' Credit Suisse analyst Christel Aranda-Hassel said.

'One explanation may be that economies with trade surpluses were more vulnerable to a sharp contraction in global demand than those economies with trade deficits,' she added.

Russia and Ukraine are widely expected to be in recession soon. -- AFP