The European Union says it is facing a "deep and protracted recession" as a consequence of the world financial crisis.

The economies of the 16 nations that use the euro will shrink by 1.9 percent in 2009, with the entire EU contracting 1.8 percent, the European Commission predicts.

It says 3.5 million jobs will disappear in the EU and government deficits soar as they borrow heavily to stoke growth.

The EU executive warned that the outlook was still exceptionally uncertain, describing the economic crisis as the worst faced by the world since WWII.