Analytics, Economics, EU – Baltic States, Financial Services, GDP

Forcing the two major European economies to meet the EU's tough deficit criteria "would likely depress activity further and even risk tipping the euro area into another recession," it said.

France and Italy's "slower pace of structural fiscal adjustment... proposed in their 2015 budget plans seems appropriate," said the Organization for Economic Cooperation and Development, which provides economic analysis and advice to its 34 industrialized members.

Its assessment came as the European Commission is due to deliver its verdict of member states' budgets this week, with France and Italy under fire after having submitted figures that fall short of the EU's criteria.

But the OECD appeared to side with Paris and Rome, urging the eurozone to "slow down structural budget consolidation relative to previous plans to reduce the drag on growth". It also called for further stimulus in the European single currency zone to prop up growth.

"The euro area is grinding to a standstill and poses a major risk to world growth, as unemployment remains high and inflation persistently far from target," said the OECD's chief economist Catherine Mann.

In the semi-annual report the OECD lowered its forecast for global growth this year by a tenth of a percentage point to 3.3%. For 2015 it cut the forecast by two tenths of a point to 3.7% growth.

The OECD left in place its forecast for the 18-nation eurozone to expand by 0.8% this year and by 1.1% in 2015.