The euro zone avoided recession with zero growth in the first quarter, official data showed today.
The figures surprised analysts who had expected worse but still warn of a long, hard uphill slog.
The euro zone showed zero growth in the first three months of the year, after a 0.3% contraction in the last quarter of 2011.
Analysts had forecast a 0.2% fall in output from January to March, which would have marked two quarters in a row of shrinkage, or recession.
The figure, subject to confirmation on June 6, provided some respite for policy-makers on the day German Chancellor Angela Merkel meets new French President Francois Hollande for the first time since his election victory.
Hollande throughout his election campaign called for a German-inspired treaty on strict fiscal discipline to be widened to include measures to boost medium-term economic output, but Merkel opposes any renegotiation of the pact.
Germany, which has the biggest economy in the European Union, helped to keep the whole of the euro zone out of recession by posting unexpectedly strong growth of 0.5%.
The French economy stagnated in line with the average, while out put in Italy contracted by 0.8% and in Spain by 0.3%. Even the Netherlands, regarded as a strong economy, experienced contraction of 0.2%.
Analysts warned that things "will only get worse" with the euro zone periphery mired in recession - Greece posting a 6.2% slide - and German exports faltering.
European Commission forecasts released on Friday tipped an overall contraction of 0.3% this year before renewed growth of 1% in 2013, with unemployment at a record 11%.
Eurostat said the EU as a whole, which also includes big non-euro states Britain and Poland, recorded similarly weak 0.1% growth, after a 0.3% contraction the previous quarter.
For both the euro zone and the EU, the numbers marked a signficant reverse compared with a year earlier, when they posted growth of 0.7% and 0.8% respectively.
The euro zone also lagged well behind what the EU gave as a comparable figure for the US for January to March, of 0.5% growth.