Euro zone in recession

The zone's economy shrank by 0.2 percent over the last three months following 0.2-percent negative growth in Q2 2008. Two consecutive quarters of economic contraction are enough to declare a technical recession.

The news did not come as a surprise as the majority of the area's biggest economies are either already experiencing negative GDP growth or are expected to see it in upcoming quarters. The German economy, for instance, shrank by 0.5 percent in Q3 2008 following a 0.4 percent drop in the previous quarter. Italy is also already in a recession, while Spain and the UK are expected to join the club soon.

According to Piotr Kuczyński, chief analyst at financial consultancy Xelion, the recession in the euro zone will significantly affect the Polish economy. "Approximately 70 percent of Polish exports go to the euro zone so the recesion, which will definitely translate into a decrease in orders, is bound to cause the Polish economy to slow down," Kuczyński told WBJ.

The euro zone includes 15 of the EU's 27 member states.