European Union officials say the 16 nations that use the euro face a recession this year, which will bring rising unemployment and growing government debts.
Officials say the economies will shrink by 1.9% this year, while unemployment goes above 9%.
The forecast is even gloomier than one issued in November.
Experts predict the EU economy will recover somewhat in the second half of this year, and resume growth in 2010, but warn the outlook is uncertain.
European nations are trying to ease the impact of the recession by crafting stimulus packages that now total in the hundreds of billions of dollars, which will boost government deficits.
Some information for this report was provided by AFP and AP