Eurozone recession to continue in 2013: EU RECESSION in the crisis-hit eurozone will continue unabated for the rest of the year with unemployment remaining at record levels, the EU warns, though signs of recovery could emerge in 2014. Economic output in the 17-nation area - home to 340 million people and a global rival to the United States, Japan and emerging giants - will shrink by 0.4 per cent this year, the European Commission said on Friday, worse than the 0.3 per cent forecast in February and after a 0.6 contraction last year. Record unemployment in the single currency area will endure, the Commission's spring forecasts showed, with strong divergence between richer eurozone states to the north and members to the south mired in deep recession. Repeating its last estimate, the Commission said eurozone joblessness this year would hit a record 12 per cent and 11 per cent across the whole 27-member EU. The rates vary hugely, with an alarming 27 per cent in Spain and a low 4.7 per cent in Austria. "In view of the protracted recession, we must do whatever it takes to overcome the unemployment crisis in Europe," EU Economic Affairs Commissioner Ollie Rehn said in statement accompanying the Commission's latest economic forecast for the eurozone and full European Union. "In Spain and Greece unemployment rates are at unbearably high levels," Rehn said at a news conference. France, which has barely avoided recession despite significant headwinds, will in the end shrink by 0.1 per cent in 2013 as weakness in household demand, a key economic driver, finally takes its toll. France will then rebound to 1.1 per cent growth in 2014, the data said. But France will widely miss its commitment to meet the EU's 3 per cent of GDP deficit ceiling and will post a 3.9 per cent deficit this year and 4.2 per cent shortfall next year. Spain will continue a hard slog from its crisis, brought on by the 2008 implosion of a decade-long housing bubble, and should contract by 1.5 per cent in 2013 before reversing to 1.4 per cent in growth in 2014. But Spanish public finances will remain dire well into next year with a government deficit of 6.5 per cent in 2013 expected to worsen in 2014 to 7.0 per cent as certain measures expire. The crisis will be hugely felt in recently bailed out Cyprus where output is expected to contract by 8.7 per cent this year in the wake of a severe restructuring of the island nation's key banking sector, including a controversial "haircut" on deposits. The Cypriot recession will prolong into 2014 and beyond, the Commission said, with the economy expected to contract by an overall 15 per cent between 2012 and 2015. In a rare glimpse of encouragement, the Commission saw recovery in Greece by the end of the year after six consecutive years of recession. The country is forecast to eke out 0.6 per cent growth in 2014, after contracting sharply by 4.2 per cent this year.