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Morning business round-up: Eurozone economy to shrink

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

The eurozone economy is forecast to shrink this year as its debt crisis continues to bite, according to the European Commission's spring forecast.

The Commission confirmed its prediction of a 0.3% contraction in 2012 in the economies of the 17 countries that use the euro, with growth of 1% forecast for 2013.

European Commissioner for Economic and Monetary Affairs Olli Rehn said a recovery was "in sight" for the eurozone.

The Spanish government is planning to clean up its banking system.

It is likely to force Spanish banks to set aside extra money, in the region of 30bn euros ($39bn; £24bn), to cover the cost of loans going bad.

The weekly cabinet meeting is also expected to approve a plan to force banks to put bad property loans into separate companies.

Earlier in the week, the Spanish government took a 45% stake in Bankia.

European banks continue to suffer from the eurozone crisis and from the fall-out of JPMorgan's surprise $2bn trading loss.

The latest casualty is French bank Credit Agricole, which reported worse-than-expected three month results, depressed by more write-offs of Greek debt.

The lender reported net profit of 265m euros ($342m; £213m), down 76% from the same period last year. It took a charge of 940m euros for losses in Greece.

The latest data from China has indicated that the country's economy is continuing to slow, raising the prospect of monetary policy easing.

In April, factory output, retail sales and consumer price growth all slowed, a sign that global and domestic demand was falling.

The data comes just a day after China reported that its export and import growth had slowed during the month.

In Japan, Sony shares have tumbled to a 31-year low, a day after the company reported a record annual loss of 456.7bn yen ($5.7bn; £3.5bn).

Sony shares fell as much as 6.7% to 1,132 yen on the Tokyo Stock Exchange.

The firm, which has been making a loss for each of the past four years, has forecast that it will return to profit in the current financial year.

Japanese electronics giant Panasonic reported a record annual loss after demand for plasma TV screens fell and a series of natural disasters hit output.

It reported a net loss of 772.2bn yen ($9.7bn; £6.0bn) for the year to March, with sales down 10% to 7.85tn yen.

The company has also been hit by competition from rival TV makers and adversely affected by the strong yen.

But it predicted that it will bounce back into profit in the current year, helped by cost-cutting.

Nissan reported a sharp rise in profits for the January to March quarter, as the carmaker pushed aggressively into fast-growing markets.

The company reported a net profit of 75.3bn yen ($943m; £585m), up from 30.8bn yen a year earlier.

Nissan said its global sales reached 4.8 million units in the financial year 2011, a record for the company.

In the latest Business Daily podcast, former International Monetary Fund chief economist, Simon Johnson, discusses whether the Fund has pledged too much of the world's money to countries that can't pay it back.

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