The ongoing saga about a possible bailout plan for debt-laden Greece reached boiling point yesterday at the EU summit.

The market had anticipated a rescue plan to be detailed that would include some form of loan from either the ECB or neighbouring eurozone countries. However, enthusiasm turned to disappointment as EU leaders said they would stand ready to shore up Greece’s finances but failed to give any specifics.

This morning, the single currency’s woes have been added to after data from Germany revealed that the economy stagnated in the three months through December 2009. Forecasts had not been particularly optimistic, expecting just 0.2% growth in the quarter. In falling short of this expectation though, serious questions will now be raised about the stability of the eurozone recovery.

 “Of real concern is that Germany had been the most likely country to offer assistance to Greece. Given Germany’s stature in the eurozone, the market expected any form of bailout plan to have Germany at its heart. Today’s figure will be of deep concern to Chancellor Angela Merkel, and she may now be focusing on getting her own economy back in shape before aiding Greece,” commented Duncan Higgins, senior analyst at Caxton FX.

The eurozone also published their own fourth quarter GDP figure this morning, which also disappointed forecasts. Data revealed that the economy grew by just 0.1%, some way below the third quarter figure of 0.4%.

Higgins continued, “This highlights the extent of the problems in the eurozone. Deep set fiscal problems in not only Greece, but also Spain and Portugal, are weighing heavily on the eurozone recovery and there is little light at the end of the tunnel. The single currency is also going to continue suffering as the risks of investment in the region become ever more apparent.”

Currently the euro has slid another 0.3% against the pound, and has hit a nine-month low against the US dollar this morning.