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The Eurozone's largest economy, Germany, shrank by 0.5 percent, a sharp fall from 1.2 percent growth of the first quarter that was propped up by one-time technical and construction activities, the International Herald Tribune reported Friday.

The French economy also shrank in the second quarter, down 0.3 percent, as consumers pulled back on spending, the report said.

"There are a lot of headwinds and not many tail winds", said Kenneth Wattret, chief Eurozone economist at BNP Paribas.

Spain's economy was nearly stagnant, growing 0.1 percent, its slowest rate since 1992, the Tribune reported.

Moving the opposite direction of many central banks, the European Central Bank raised its interest rates in July and appears to remain focused on curbing inflation.

"There is no reason, in my view, to dramatize the situation", a member of the bank's executive board Jurgen Stark, said in a recent interview. "However, there is a risk that analysts and politicians talk down the euro area economy, which might have a negative impact on business and consumer sentiment", he said.

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