Growth is what is needed in the troubled parts of Europe, not a procession of legislation that meets the IMF, ECB and World Bank rules.

The battle between austerity and growth was already evident in the fourth quarter. Euro zone government expenditure fell 0.2 percent, while industry contracted 2 percent and imports were down 1.2 percent, making for some of the worst readings since the world was dragged into the 2008/2009 financial crisis.

Output in the 17 countries sharing the euro shrank 0.3 percent in October to December from the third quarter, the European Union's statistics office Eurostat said, confirming its estimate of last month and giving a more detailed breakdown.

Economist Shayne Heffernan said While the IMF, World Bank and ECB continue to demand austerity measures in Greece, the idea of pulling money out of the failing economy may not be the answer.

Many Economists, including myself, are of the opinion there needs to be a redirection of funds, not a reduction of funds available in countries like Greece.

The European Commission forecasts a recession of the same magnitude this year. That would be the euro zone's second contraction in just three years as the bloc's debt crisis drags on a region that generates around 16 percent of the world's economic output.

Greece is likely to endure another year of recession in 2012 and probably will not return to growth until 2014, while Germany and France, the euro zone's biggest economies, are seen escaping a contraction this year.

The growing divergence between the euro zone's prosperous north and poorer south was clear in the last quarter of 2011, when Italy, the euro zone's third largest economy, saw output shrink 0.7 percent, while France expanded 0.2 percent.

The European Central Bank's offer of a trillion euros in medium-term lending to banks and the EU's fiscal pact have brought Italian and Spanish bond yields to manageable levels.

ECB President Mario Draghi is expected to keep interest rates on hold at the bank's monthly meeting on Thursday, probably judging that the weak economy is offsetting concerns about high oil prices and inflation.

Draghi said last week in Brussels that he was reassured by the euro zone's commitment to fiscal discipline and reforms, although he said the economy remains fragile.

That fragility is most evident in the contrasting fates of debt-stricken Greece and efficient, export-driven Germany, a gap EU leaders at last week's summit appeared unable to resolve in the short term.

Shayne Heffernan

Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.

Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.