In view of mass unemployment and a protracted debt crisis, the EU executive was willing to give some nations a couple of more years to bring their public deficits in line with the maximum 3 percent of GDP allowed under EU regulations, Brussels said on Wednesday.

Among the countries to be granted a period of grace were France, Spain, the Netherlands and Portugal, the Commission explained, meaning that those nations would not have to pay hefty fines for insufficient budgetary discipline right away. EU finance ministers will still have to approve the measure.

Brussels urged eurozone member France to finally start reforming its pension system in return for getting to more years to bring its budget back in line. "The pension system will still face large deficits by 2020 and new policy measures are urgently needed to remedy this situation," the Commission argued in its budget assessment report.

More trouble ahead

The French economy has been stagnating since its last recession for years ago and contracted again in the past two quarters while the number of jobless people has hit an all-time high in the country.

European Commission President Jose Manuel Barroso also issued a comment towards Germany, saying it should avoid any kind of complacency. He recommended the country to consider wage increases and open up its services market to more competition.

"It's important that surplus countries remove the obstacles to stronger demand internally," Barroso said.

Germany's mass-circulation "Bild" newspaper quoted EU Energy Commissioner Günther Öttinger as saying at a meeting of trade chambers that the bloc was in a poor shape. Öttinger allegedly said Bulgaria, Romania and Italy were "basically ungovernable," while Britain and other nations saw anti-EU sentiments growing massively. He was also quoted as saying that France was not at all prepared for necessary reforms of the pension system and a leaner state apparatus.

hg/rc (dpa, Reuters)