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GDP was down by 1.5 percent in both the euro area and the EU during the last three months of 2008, compared with the previous quarter, flash estimates by the Statistical Office of the European Communities (Eurostat) showed, the deepest fall in GDP since 1999 when the zone came into being.
The seasonally adjusted GDP decreased by 1.2 percent in the euro area and by 1.1 percent in the EU in the fourth quarter of 2008, the Eurostat said.
In the last three months of 2007, GDP in both zones grew 0.6 percent and 0.8 percent respectively.
In the third quarter of last year, growth rates were down 0.2 percent in both zones.
For the whole year of 2008, GDP grew by 0.7 percent in the euro area and by 0.9 percent in the EU, the Eurostat said.
The Euro zone, which has been enlarged from 15 nations to 16 with the joining of Slovakia on January 1 this year, slipped into recession as its GDP contracted in the second and third quarters last year.
The deeper-than-expected contraction in the fourth quarter indicates the recession has deepened.
Economists had predicted a contraction of 1.3 percent because of the global financial crisis.
Germany, the largest economy in Europe, recorded a fall of 2.1 percent quarter-on-quarter, the steepest plunge since reunification in 1990. France posted a quarter-on-quarter contraction of 1.2 percent.
The EU, which saw a 0.0 percent growth in the second quarter of last year, also fell technically into recession in the last three months.