EU economic and monetary affairs commissioner Mr Pedro Solbes said the EU believes growth in the euro zone this year will be under 1 per cent.
This appears more pessimistic than comments by the commission yesterday stating growth was just "unlikely to exceed 1 per cent" this year.
Mr Solbes confirmed the EU commission's expectation of 3 per cent growth next year "is no longer to be held" and it nows sees growth in 2003 coming in somewhere above 2 per cent.
He also did not rule out the EU would have to present Italy, France, and Germany with early warnings for their high budget deficits.
Mr Solbes said countries will only have to balance their deficits by the new deadline of 2006 after the deficits have been stripped of cyclical effects.
He indicated the EU would not look critically at the headline deficit figures - the nominal deficit - but at the figures which take account of economic slowdowns and upturns - the structural deficit.
AFP