France branded new 'sick man of Europe as figures show economy falls France saw production continue to drop with fall of 0.1% in third quarter President Hollande is fighting ailing economy and unemployment at 11% Bank of France stays confident saying economy will grow in 4th quarter Eurozone, however, has grown for two straight quarters, raising hopes Trouble brewing: President Francoise Hollande is struggling with a faltering economy and unemployment at a 16-year high of 11 per cent France was branded the new 'sick man of Europe' today amid fears it may slip back into recession. President Francois Hollande is struggling with a faltering economy and unemployment at a 16-year high of 11 per cent while production in Europe's second largest economy fell by 0.1 per cent in the third quarter. Germany, however, enjoyed a rise of 0.3 per cent while Britain's economy grey by 0.8 per cent. But the Bank of France vowed that the economy will gather steam in the fourth quarter with growth of 0.5 per cent. The Insee statistics office sees growth at 0.4 per cent in the same period. 'It's the unbalanced nature of the upturn among member states that is the most worrying,' said Markit's Chris Williamson. France looks increasingly like the new sick man of Europe. He said Europe's second-largest economy could fall back into recession following its 0.1 per cent quarterly contraction in the third quarter. A recession is commonly defined as two straight quarters of negative growth. Markit's monthly composite purchasing managers' index, known as PMI, for the eurozone did bring some good news for Europe's economy. The index rose to a three-month high of 52.1 in December from 51.7 in November. The increase took the index, where anything about 50 indicates expansion, close to the 27-month peak seen in September. GDP graph: Production in Europe's second largest economy fell by 0.1 per cent in the third quarter. Germany, however, enjoyed a rise of 0.3 per cent while the United Kingdom's economy grey by 0.8 per cent Since the recession ended, the eurozone has grown for two straight quarters but the recovery has been unspectacular - in the third quarter the eurozone only grew by 0.1 per cent from the previous three-month period. That corresponds to an annualized rate of around 0.4 per cent, way down on the US's 3.6 per cent. Though Markit thinks the fourth quarter may see the rate of growth double, its headline index masks worrying developments, particularly over the state of France, which saw its PMI fall to a seven-month low of 47.0 in December from 48.0 the previous month. Overall, the survey may ease the immediate pressure on the European Central Bank to do more to shore up the recovery despite below-target inflation and ongoing budget restraints in a number of economies, such as Greece, Spain and Italy. However, with growth likely to remain modest over the months ahead, many analysts think the bank will need to do more. Though the bank has little room to cut its benchmark interest rate following last month's reduction to a record low of 0.25 per cent, the ECB has other potential tools at its disposal. Production fall: Experts say Europe's second-largest economy could fall back into recession following its 0.1 per cent fall in production in the third quarter. A recession is commonly defined as two straight quarters of negative growth It could give banks more long-term, cheap loans so they can lend more. It could even decide to make banks pay to keep funds on deposit at the central bank - again, to encourage them to lend rather than hoard cash. Mario Draghi, the ECB's president, said today that the bank continues to expect its key interest rates to remain at present, or lower, levels, for an extended period of time. 'Thus, monetary policy will remain accommodative for as long as necessary,' he told the European Parliament's committee on Economic and Monetary Affairs in Brussels. While noting that it takes time for policy decisions to work their way through markets and affect the wider economy, Draghi said the ECB is 'ready and able to act if needed' in the event that a protracted period of low inflation entails. The November rate cut was largely predicated on the fact that consumer price inflation unexpectedly fell to 0.7 per cent in the year to October. That was way below the ECB's target of keeping price rises just below 2 per cent. The latest count saw inflation edge back up to 0.9 per cent in the year to November.