The downbeat forecast, coming a day after data showed a slump in business activity in the euro area worsened unexpectedly this month, added to perceptions that Europe is continuing to struggle with the dual burdens of trying to stimulate growth while cutting spending to pare deficits and balance budgets.

Olli Rehn, the European commissioner for economic and monetary affairs, insisted that Europe's belt-tightening policies were working and would lay the groundwork for a recovery. He said the European economy should expand in 2014, with growth reaching 1.6 percent across the Union and 1.4 percent in the euro area.

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