It said downside risks such as late implementation of structural reforms, geopolitical tensions, continued drags on inflation and fragility in financial markets still dominated the growth outlook.

Publishing its Autumn forecast, the commission also projected weak economic growth for the rest of this year, revising it down from 1.2% to 0.8%. Over the course of next year, growth should gradually rise before picking up further still in 2016.

The commission also revised down its predictions for growth in the wider European Union. It is expected to reach 1.3% in 2014 (down from the 1.6% predicted in spring) and improve to 1.5% next year (down from the earlier prediction of 2%).

Jyrki Katainen, European Commission vice-president for jobs, growth, investment and competitiveness, said: ‘The economic and employment situation is not improving fast enough. The European Commission is committed to use all available tools and resource to deliver more jobs and growth in Europe.

‘We need to put forward a €300bn investment plan to kick-start and sustain economic recovery. Accelerating investment is the linchpin of economic growth.’

Pierre Moscovivi, commissioner for economic and financial affairs, taxation and customs, added that there was no single, simple answer to the challenges facing the European economy.

‘We need to act across three fronts: for credible fiscal policies, ambitious structural reforms and much-needed investment, both public and private,’ Moscovivi urged.

He called on the bloc’s 28 member states to assume responsibilities in Brussels, in national capitals and regions ‘to generate higher growth and deliver a real boost to employment for our citizens’.

Germany, France and Italy in particular have struggled with weak economic performance, the forecast said.

The commission sharply cut Germany’s economic growth for 2015 from the 2% it predicted in May, to 1.1%. For the rest of this year, growth is expected to reach 1.3% down from 1.8%.

Growth projections were also downgraded for France and Italy, as they struggled to achieve the EU’s mandated targets to keep budget deficits and government debt in order.

France is expected to see growth of 0.7% next year, instead of 1.5% the commission predicted in spring, while Italy’s growth outlook is expected to reach 0.6% next year from the 1.2% initially predicted.