EUROPE will take longer to recover from its economic crisis as it tackles a worse-than-expected recession in the eurozone and unemployment at record levels, the European Union warned yesterday.

In its spring economic forecast, the EU said that gross domestic product in the 17 member countries that use the euro will shrink by 0.4 percent this year, better than the 0.6 percent contraction in 2012 but 0.1 percentage points worse than the EU had forecast back in February.

The report also had bad news for the wider 27-country EU: it now expects the region's economy to shrink by 0.1 percent in 2013, against a forecast of 0.1 percent growth in February.

"Grappling with the aftermath of a profound financial and economic crisis, the EU economy is set to pick up speed only very slowly in the course of this year," the report said.

The grim outlook even forced EU Commissioner Olli Rehn to raise the specter that France, the bloc's second-biggest economy, may be given two extra years to bring its deficit within the target 3 percent of GDP needed for a sustainable future.

"It may be reasonable to extend the deadline by two years and to correct the excessive deficit at the latest by 2015 in France," Rehn said.

After the eurozone crisis over too much debt broke in late 2009, the region's governments slashed spending - either to meet conditions for bailout loans, or to reassure jittery bond markets.

But austerity has also inflicted severe economic pain. Slashing spending and raising taxes have proved to be less effective at reducing deficits than initially thought - and perhaps counter-productive.