Hopes of eurozone recovery momentum have been dashed with new EU forecasts of millions of jobless as Brussels stepped up pressure on Germany and France to re-shape their economies.
The European Commission says growth across the 17-member single currency area would amount to 1.1 per cent next year, down from the 1.2 per cent it forecast in May.
But it should then rise to 1.7 per cent in 2015.
The eurozone economy will shrink by 0.4 per cent this year, the commission said on Tuesday, unchanged from the previous estimate.
The commission signalled that France and Spain are set to overshoot their deficit reduction targets, and conceded that a "discussion" is imminent on Germany's longstanding trade surplus - most recently criticised by the US Treasury as a drag on EU-wide output.
The growth figures compare poorly with sterling neighbour Britain, tipped to grow 1.3 per cent this year followed by 2.2 per cent in 2014 and 2.4 per cent in 2015.
The US economy meanwhile will expand 1.6 per cent in 2013, rising to 2.6 per cent and 3.1 per cent in the next two years.
Brussels warned that eurozone unemployment would be stubbornly higher than first thought next year - at 12.2 per cent rather than 12.1 per cent - so potentially going through the 20-million mark.
"The fiscal consolidation and structural reforms undertaken in Europe have created the basis for recovery," EU Economic Affairs Commissioner Olli Rehn said, speaking of a "turning-point" for the global economy.
At the same time, it is "too early to declare victory," he said, adding that "unemployment remains at unacceptably high levels."
With eurozone inflation tipped as stable at around the 1.5-per cent mark for the period covered by the forecasts, the Commission is worried about fiscal "uncertainty" in the United States as debt mounts, coupled with mounting "vulnerabilities" in emerging markets.
Brussels said that years of commodities and investment-driven growth in the Russian and Chinese economies, for instance, may now be out-of-date and the emphasis should be put on domestic rather than export demand.
Trade imbalances within the eurozone are already causing concern, the Commission pegging Germany's current account surplus - the broadest measure of trade and fund flows - at 7.0 per cent of gross domestic product (GDP) this year, easing only slightly to 6.6 per cent next year and 6.4 per cent in 2015.
The reading has been above the EU's recommended ceiling of 6.0 per cent since 2007.
Germany's export-led growth, which has less of a trickle-down effect than demand-led growth would, has been a sore point for some time.
Berlin late last month rejected the US criticism as "incomprehensible," saying there were no such imbalances in the EU economy.
As well as unemployment, the modest recovery poses other problems, especially for member state public finances as tax revenues remain under pressure.
Despite waves of austerity already, Spain's public deficit will hit 5.9 per cent next year and worse still, rise again to 6.6 per cent in 2015.
Twice-bailed out Greece is finally set to emerge from six years of recession next year.
The downturn, though, would continue throughout 2014 in Slovenia and Cyprus.
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