The eurozone is close to recession, Jean-Claude Juncker, the Luxembourg premier who heads the eurogroup, said overnight after the World Bank slashed its global growth forecasts.

"In the eurozone, we are on the brink of a technical recession," he said, referring to the term used for two consecutive quarters registering falls in gross domestic product.

The World Bank slashed its growth forecasts from 3.6 per cent to 2.5 per cent in 2012 on Tuesday and warned that rich nations' debt problems may yet reap a crisis that would eclipse the tumult of 2008.

"I think budgetary consolidation is an approach to which there is no alternative," Juncker said at a new conference held after talks with new Belgian premier Elio Di Rupo.

"We must consolidate our public finances but also draw attention to the need to forge a real growth policy for Europe," he added.

"This is what the two of us will insist on at the January 30 meeting," an informal summit of European Union leaders aimed at reaching agreement on a fiscal pact to improve budgetary discipline and economic governance.