In the final quarter of 2011, the euro zone economy fell back into contraction, for the first time since the second quarter of 2009. According to the advance estimate, euro zone GDP contracted by 0.3% Q/Q, slightly above the consensus, which was looking for a decline by 0.4% Q/Q. The breakdown will only be released with the second estimate, on the 6th of March. National data show a mixed picture with the biggest surprise coming from France, as the country could escape a contraction in the fourth quarter. Also the French GDP details were encouraging as strength was based in household consumption (0.2% Q/Q), investments (0.9% Q/Q) and netexports, while inventories dragged quarterly growth down by 0.8% Q/Q. The contraction in Germany (-0.2% Q/Q) was slightly milder than expected, while Italian (-0.7% Q/Q) and Dutch (-0.7% Q/Q) GDP data disappointed. Overall, the outcome is slightly stronger than expected thanks to strong data from France. At the start of the new year, the economic climate has improved somewhat, but it remains still uncertain whether the euro zone can escape a technical recession.