The euro zone faces another full year of recession this year with unemployment likely to surge above the 20-million mark and French and Spanish state spending badly overshooting targets, the EU said on Friday. Economic output across the 17-state currency area is set to shrink by 0.3 per cent this year after a 0.6-per cent contraction last year, the European Commission said. That means that millions more people are likely to lose their jobs, with already record unemployment expected to rise markedly right into next year. Millions more people are likely to lose their jobs, with already record unemployment expected to rise markedly right into next year The EU’s winter economic forecast said there would not be a return to growth for the debt-laden monetary union – home to about 340 million people – until next year, when growth would return at a rate of 1.4-per cent from this low base. As a result, the unemployment rate would hit 12.2 per cent for this year after 11.4 per cent last year – which left the number of people unemployed already at nearly 19 million. Much of the attention was on France where the public deficit is set to be worse than expected this year and next year, veering up to 3.7 per cent of output this year and 3.9 per cent next year. France, with the euro zone’s second-biggest economy, was due this year to get back within the European Union’s deficit ceiling of 3.0 per cent of output, and had been expected to show a deficit of 3.5 per cent of gross domestic product. The gap leaves Socialist President Francois Hollande looking for special leeway from Brussels. Spain’s public deficit meanwhile exploded to 10.2 per cent of output last year, the Commission said two days after Prime Minister Mariano Rajoy said it had fallen below 7.0 per cent of GDP. The figure for next year in the EU’s latest economic forecasts would be 7.2 per cent, Brussels also said – although these figures may pre-date those of Rajoy, who said Madrid had avoided an economic “shipwreck” last year. “We must stay the course of reform and avoid any loss of momentum,” EU Economy and Euro commissioner Olli Rehn told a press conference, arguing that the drag on growth and uptick on joblessness was a natural consequence of “the ongoing rebalancing of the European economy.” Across the full, 27-state EU, which also includes Britain and Poland, growth is expected to be 0.1 per cent this year and 1.6 per cent next year, with the non-euro zone part doing better on unemployment too.