EUROPE'S economic recovery failed to gather pace in the final three months of 2010, official figures showed yesterday, amid heavy snow in a number of countries and a ramp up in austerity measures across the single currency bloc.

Eurostat, the EU's statistics office, reported that the 16 countries that were using the euro at the end of 2010 - Estonia joined last month - grew 0.3 percent in the fourth quarter from the previous three month period.

Eurostat said that's below the 0.8 percent equivalent rate in the United States but better than the 0.3 percent decline in Japan.

The eurozone's growth rate was the same as the previous three month period and in line with forecasts. Germany and France, Europe's two biggest economies, grew less than anticipated - Germany's 0.4 percent increase was modestly below expectations but France's 0.3 percent was half what was expected.

Further weighing on overall activity was the fact that two eurozone countries, Greece and Portugal, saw their economies contract as their governments imposed harsh spending cuts and tax increases to get public finances into shape.

Greece, which received a 110 billion euro (US$148 billion) bailout from its partners last May, remained in a deep recession as its economy shrank a further 1.4 percent during the fourth quarter. Figures for Ireland, the other eurozone country to need financial rescue, were not yet available.

Portugal, which is widely perceived to be the next most likely bailout candidate, posted a 0.3 percent decline, its first negative figure for a year.

A country is not technically classified as being in recession unless it reports two consecutive quarters of falling output.

Despite the declines in Greece and Portugal, economic activity across the whole of the eurozone is expected to accelerate in the first quarter of 2011, if recent surveys are to be believed.

In its February survey, the ZEW institute reported last week that investors in Germany remain buoyant with more forecasting improving economic conditions over the coming six months.

Eurostat also found that the wider 27-country EU grew by only 0.2 percent in the fourth quarter. The lower rate can be largely attributed to the surprise 0.5 percent contraction in Britain.