By Amy Wilson Last Updated: 1:57PM GMT 13 Feb 2009  The Eurozone economy, whose biggest members are Germany and France, shrank 1.5pc in the fourth quarter compared with the third quarter - a steeper fall than economists had expected. Germany had the worst fall, with the economy shrinking the most since the country was reunified in 1990.  Many of Europe's other economies fared little better during a quarter in which the collapse of Lehman Brothers deepened the financial crisis and helped tip countries into recession. France shrank 1.2pc; Italy was was down 1.2pc and Spain weakened 1pc.  The news will heap pressure on the European Cental Bank to cut interest rates in March after holding them at 2pc earlier this this month. The ECB has been attacked by economists for not moving as quickly as the Federal Reserve in America and the Bank of England to tackle the downturn.  The eurozone economy will contract 2.3pc this year, according to Howard Archer of Global Insight, as the "global recession, extended tight credit conditions and financial sector problems" take their toll.  Germany's contraction was worse than the 1.8pc economists had expected. Europe's largest economy is suffering from a fall in demand for the cars and household appliances it makes, as large parts of Europe and the US endure their worst economic condition in years. As a result, German companies are cutting jobs and investment, exacerbating the fall.  Germany's economy could shrink 2.5pc in 2008, according to the International Monetary Fund, which would be its biggest contraction since the Second World War.  European finance chiefs are expected to confront Chancellor Alistair Darling over the collpase of the pound at the Group of Seven summit later today. Companies in the euro region have complained that Sterling's weakness is making their exports less attractive and causing a switch to British-made goods.  “The news is dire,” Kenneth Wattret, an economist at BNP Paribas told Bloomberg News. “Compared to the early 1990s recession, which was painful, this is twice as big.”
Europe's economy is facing its worst recession in at least two decades,    economists warned today, after figures showed that the region's economy    contracted 1.5pc in the final three months of last year.     .