EU warns of possible recession in eurozone

By the Associated Press | November 10, 2011 | 4:40 AM EST

BRUSSELS (AP) — The European Union is slashing its growth forecast for the eurozone next year and is warning that it could even fall back into recession.

The EU says the currency union will grow a meager 0.5 percent next year, way down on the 1.8 percent growth it estimated this spring.

The sharp cut in the forecast comes as the eurozone's debt crisis has spread alarmingly to Italy.

The EU's Monetary Affairs Olli Rehn warned Thursday that "growth has stalled in Europe, and there is a risk of a new recession."

He added that said EU unemployment will be stuck at 9.5 percent.