Italian GDP growth shrank to 0% in the second quarter compared to 0.3% in the first quarter.
Germany's economy also slowed in the second quarter, albeit less markedly than had been expected.
Europe's largest economy expanded by 0.4%, down from 0.7% in the first quarter, but above forecasts of 0.2%.
Overall, a second estimate of GDP across the eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year.
Italian GDP also fell across the 28-nation European Union to 0.4% from 0.5% between the first and second quarters.
In Italy, analysts had expected GDP to grow by between 0.1% and 0.3%.
Italian Prime Minister Mario Renzi, is battling to reduce the bad debt in its banking sector, which is currently buried under €360bn worth of bad loans. Monte dei Paschi di Siena, Italy's third largest bank and the world's oldest lender, is saddled with €46.9bn of bad debt.
Alberto Bagnai, economic policy professor at the University of Chieti-Pescara, said: "There is no way to solve the banking problem without economic growth. If the whole nation doesn't start earning more it can't pay back its debts - public or private."
Read more: Italian economy stagnates as German growth slows - BBC News
Germany's economy also slowed in the second quarter, albeit less markedly than had been expected.
Europe's largest economy expanded by 0.4%, down from 0.7% in the first quarter, but above forecasts of 0.2%.
Overall, a second estimate of GDP across the eurozone confirmed that growth halved to 0.3% from 0.6% in the first three months of the year.
Italian GDP also fell across the 28-nation European Union to 0.4% from 0.5% between the first and second quarters.
In Italy, analysts had expected GDP to grow by between 0.1% and 0.3%.
Italian Prime Minister Mario Renzi, is battling to reduce the bad debt in its banking sector, which is currently buried under €360bn worth of bad loans. Monte dei Paschi di Siena, Italy's third largest bank and the world's oldest lender, is saddled with €46.9bn of bad debt.
Alberto Bagnai, economic policy professor at the University of Chieti-Pescara, said: "There is no way to solve the banking problem without economic growth. If the whole nation doesn't start earning more it can't pay back its debts - public or private."
Read more: Italian economy stagnates as German growth slows - BBC News
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