The European Commission said Friday the Eurozone would not return to growth until next year.

Europe's economy will shrink 0.3% this year after a 0.6% fall in 2012 as a result of unemployment rates and a lack of bank lending, according to the Commission.

It marked a renewed forecast from the Commission which in November predicted the European Union would grow this year.

The revised prediction also suggested Spain and France will miss debt-cutting targets as the countries struggle against difficult economic conditions.

"The ongoing rebalancing of the European economy is continuing to weigh on growth in the short term," EU Economic and Monetary Affairs Commissioner Olli Rehn said.

"The current situation can be summarised like this: we have disappointing hard data from the end of last year, some more encouraging soft data in the recent past, and growing investor confidence in the future."

He said the Eurozone's recovery rests on keeping up the momentum of reforms.

Failure to do so could "undermine the turnaround in confidence that is underway, delaying the needed upswing in growth and job creation," he added.

RD

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