THE eurozone will not return to growth until 2014, the European Commission said yesterday, reversing its prediction for an end to recession this year and blaming a lack of bank lending and record joblessness for delaying the recovery.

The 17-nation bloc's economy, which generates nearly a fifth of global output, will shrink 0.3 percent in 2013, the commission said, meaning the eurozone will remain in its second recession since 2009 for a year longer than originally foreseen.

The commission, the European Union executive, late last year forecast 0.1 percent growth in the eurozone for 2012, but now says tight lending conditions for companies and households, job cuts and frozen investment have delayed an expected recovery.

It sees the eurozone economy growing 1.4 percent in 2014, with a decline of 0.6 percent for 2012.

"The improved financial market situation contrasts with the absence of credit growth and the weakness of the near-term outlook for economic activity," said Marco Buti, the commission's director-general for economic and monetary affairs.

"The labor market ... is a serious concern," he said in a preamble to the commission's latest forecasts.

The European Central Bank's promise last year to do what it takes to defend its common currency has removed the risk of a break-up of the eurozone, and member countries' borrowing costs have come down from unsustainable levels.

But the damage from the 2008/2009 global financial crisis and the ensuing eurozone debt crisis has been greater than expected on the real economy, with global demand for eurozone exports one of the few saviors in terms of generating growth.