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Brussels - Economic growth in the eurozone will be lower than previously expected, hovering around the 1% mark in both 2014 and 2015, the European Commission said on Tuesday in its latest economic forecasts.
The European Union's executive had previously expected the eurozone economy to grow by 1.2% this year and by 1.7% in 2015, but revised those estimates down to 0.8% and 1.1% respectively.
The 18-nation currency bloc emerged from recession last year, but worries have mounted that its recovery may be losing traction amid lackluster growth, high unemployment and low inflation.
Its largest economies are falling behind: Germany, France and Italy all had their growth forecasts revised downward.
READ: German business confidence slumps
"The economic and employment situation [in Europe] is not improving fast enough," said Jyrki Katainen, the commission's new vice president for growth and jobs.
"We must all assume our responsibilities - in Brussels, in national capitals and in our regions - to generate higher growth and deliver a real boost to employment for our citizens," added EU Economy Commissioner Pierre Moscovici.
Economic powerhouse Germany is now expected to see growth of only 1.1% next year, while France and Italy are forecast to deliver growth levels of 0.7% and 0.6% respectively.
The only major EU economy delivering higher-than-expected growth would be Britain, which is not a member of the eurozone.
READ: Eurozone in firing line over growth, Greece
"The EU's recovery appears weak, in comparison to other advanced economies and with respect to historical examples of post-financial crisis recoveries," the bloc's executive said in a statement.
There are "risks" that growth may come in even lower, it warned, pointing to "geopolitical tensions, fragility in financial markets and the risk of incomplete implementation of structural reforms."
Eurozone unemployment, meanwhile, is expected to fall only slowly, reaching 10.8% in 2016. Eurozone inflation will need until then to crawl back up to 1.6%, the commission said - back within reach of the European Central Bank's (ECB) target of just below 2%.
EU officials in Brussels have also been battling with national deficit and debt levels that remain stubbornly above the recommended levels of 3% and 60% of gross domestic product.
France, the eurozone's second-largest economy, was supposed to get its budget shortfall below 3% in 2015, but has already indicated that it will likely need an extra two years.
READ: Eurozone unemployment stuck at 11.5%
However, the commission predicted on Tuesday that the deficit will keep steadily rising from 4.4% this year to 4.7% in 2016, unless Paris undertakes further efforts.
The French government, by contrast, had announced that it expects the deficit to go from 4.4% this year to 3.8% in 2016, before dropping below 3% the year after.
The public deficits in Spain, Portugal, Britain, Slovenia, Croatia are also set to run afoul of EU targets, according to the forecasts.
READ: France faces pressure over spending plans
Budget cuts and other fiscal-consolidation measures have proven politically tricky in some countries, amid public frustration over their sometimes painful consequences and a wider debate underway on whether the EU is doing enough to promote growth.
The new forecasts were released just days before the ECB holds its next interest rate-setting meeting and EU finance ministers meet to consider the way forward.
In other developments Tuesday, the ECB launched a new eurozone bank supervisor - the first step towards a much-heralded banking union for the region. The measure is considered key to restoring trust in the eurozone.
"The single supervisor will now ensure the day-to-day surveillance of banks in the eurozone, helping to keep the European banking sector safe and remaining alert to new risks emerging," said EU Financial Services Commissioner Jonathan Hill.
