The German and French economies both contracted in the final three months of 2012, figures have shown, according to BBC News.

Germany - the eurozone's largest economy - saw its GDP shrink by 0.6% as exports declined.

The French economy shrank by 0.3% in the fourth quarter. Both numbers were worse than forecast, Some economists have predicted France is heading for a recession - usually defined as two consecutive quarters of contraction.

However, France's central bank recently forecast that the economy would expand in the first three months of 2013.

The French President Francois Hollande is trying to make France more competitive by slashing government spending and relaxing labor regulations.

The German statistics office said: "Comparatively weak foreign trade was the decisive factor for the decline in the economic performance at the end of the year: in the final quarter of 2012 exports of goods declined significantly more than imports of goods."

All eurozone countries have been hit hard by the debt crisis.