* Germany, France both post Q3 growth of 0.2 percent
* Fourth quarter likely to be grimmer
* Italy shrinks less than forecast
* Economists expect 0.2 pct euro zone contraction
By Michelle Martin and Daniel Flynn
BERLIN/PARIS, Nov 15 Germany and France each
grew modestly by 0.2 percent in the third quarter but with the
euro zone's debt-laden members suffering deeply, the currency
bloc as a whole is likely to have slid into recession.
The quarterly performance Europe's dominant economy reported
on Thursday was in line with forecasts and analysts said it
could not defy gravity for much longer. The French economy
surprised on the upside, having been expected to post no growth
at all after a revised 0.1 percent fall in the second quarter.
"That was the last good number from Germany for the time
being. The German economy will probably shrink somewhat in the
fourth quarter given that orders have been falling for the last
year and the business climate ... has caved in," said Joerg
Kraemer, chief economist at Commerzbank.
"That is due to the uncertainty caused by the euro zone
crisis. I don't expect the German economy to return to decent
growth rates until the middle of next year."
Most economists expect Germany to contract in the fourth
quarter for the first time since the end of 2011, though healthy
consumer appetite and a robust jobs market should help to avoid
a recession, defined as two quarters of contraction.
Where Germany goes, France is likely to follow.
"We expect the French economy to contract again in the final
quarter of this year," said Joost Beaumont of ABN Amro.
EU statistics office Eurostat is predicted to say that the
bloc's output shrank 0.2 percent in the third quarter, as it did
in the second. Business surveys point to a deeper decline.
That would push the 9.4 trillion euro ($12 trillion)
economy, which generates a fifth of global output, officially
into recession. Italy and Spain have been contracting for months
and Greece -- where the euro debt crisis began -- is suffering
an outright depression.
The figures will be released at 1000 GMT.
Hopes for a recovery next year are also fading, with the
European Commission saying the economy will flatline in 2013.
However, with France beating expectations and Italy, the
euro zone's third largest economy, shrinking by just 0.2 percent
over the past three months -- less than the 0.5 percent forecast
-- it is possible the euro zone just avoids recession again.
There have been fledgling signs the Italian economy is
improving. Consumer confidence has risen slightly and the pace
at which industrial output has fallen is slowing.
Nonetheless, the country's "acquired growth" at the end of
the third quarter stood at -2.0 percent, meaning that if GDP is
flat in the final three months of the year, the economy will
have shrunk by two percent over the year as a whole.
Spain, which has kept the euro zone on tenterhooks over a
decision on whether or not to seek help from the euro zone
rescue fund, is also in recession. It contracted 0.3 percent in
the third quarter.
The Dutch economy shrank much more sharply than expected,
by 1.1 percent on a quarterly basis, and Austria's economy
contracted 0.1 percent.
Figures out earlier this week showed the Portuguese economy
shrank 0.8 percent quarter-on-quarter while Greece tumbled
further, casting doubt on whether Athens and its lenders can
come up with a credible plan to put its finances back on track.
With little prospect of better times ahead, the threat of a
public backlash cannot be dismissed.
Millions of workers went on strike across Europe on
Wednesday to protest the government spending cuts they say are
driving the region into a deeper malaise but which Germany and
the Commission say are crucial to healing the wounds of a
decade-long, credit-fuelled boom.
But the European Central Bank's pledge to buy euro zone
government bonds in potentially unlimited amounts, should a
country first seek help from the rescue fund, has diminished any
threat of a euro zone calamity.