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The contracting eurozone economy is getting worse, according to a report today from Standard & Poor’s. Here’s the general point:

Recent economic indicators continue to paint a bleak picture for Europe. The data are confirming our view that the region is entering a new period of recession, after three quarters of negative or flat growth since the final quarter of 2010. But prospects continue to vary from country to country.

The ratings agency said it now expects a negative 0.8% GDP growth rate for the eurozone in 2012 and only flat growth in 2013. For Spain, S&P predicts negative GDP growth of 1.4% in 2013, with “very weak growth” the U.K. and France and further contraction in Italy and Spain.

S&P continues:

Overall, the European economic outlook generally remains dominated by the deleveraging process occurring almost simultaneously in the public sector, the private sector, and the financial sector.

In other words, austerity is not helping. S&P also notes that the eurozone peripheral nations like Greece and Spain have seen little in the way of interest rate relief “from government deficit reduction as history would suggest.” The agency did say the ECB’s recently authorized bond purchasing program “may counteract that.”

Paul Ausick