German Chancellor Angela Merkel welcomes French Prime Minister Jean-Marc Ayrault on November 15, 2012 in Berlin, Germany. - 

A raft of economic data released this morning confirms what many economists have long suspected: Europe has officially slipped back into recession. Economic output from the Eurozone countries shrunk for two straight quarters. The region's previous recession hit just three years ago, in 2009.

Though the news was expected, the geographic extent of the economic slowdown is surprising. The data show growth in Germany -- widely considered to have a relatively healthy economy -- has slowed as well.

"It will be really interesting to see if this new economic uncertainty will change the policy-tune in Berlin and get Angela Merkel to reconsider harsh austerity measures," says Adolpho Laurenti, deputy chief economist at Mesirow Financial.

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