EU's Rehn upbeat on eurozone recovery in 2013

The eurozone's battered economies are slowly emerging from a crippling recession with growth expected to return by the second half of 2013, EU Economic Affairs Commissioner Olli Rehn said on Tuesday.

Rehn was in The Hague, where he met Liberal Prime Minister Mark Rutte as well as Finance Minister and Eurogroup finance chief Jeroen Dijsselbloem, to discuss the Commission's budget reform recommendations for the Netherlands.

"The euro area's economies are slowly emerging from the recession," an upbeat Rehn told journalists at a press conference.

"Economic activities are set to stabilise by the first half of the year and in the second half, growth should return," he said.

The Netherlands, in the grip of an economic chill over the last two years, should also see positive growth of around 0.9 percent return by 2014, Rehn said.

But the EU finance chief remained adamant the Commission believed that the Netherlands could reach a deficit target of 2.8 percent, below the EU's set target of 3.0 percent (of output) in 2014.

"Our recommendation is that the Netherlands should respect its European commitments" Rehn added, which implied extra austerity measures of around six billion euros ($8 billion).

Rutte and Dijsselbloem are insisting on only needing to reach a target of 3.0 percent in 2014, Dutch media reported.

Rehn said however that the Commission could give eurozone countries more time to get their budgets balanced -- but only under specific circumstances.

These included needing proof that the country in question did all it could to fix its budget and an unexpected downturn in the economic situation.

"It is however premature to talk of this (measure), we will see what happens in the next half year," Rehn said.

The Netherlands' public deficit came in at 4.1 percent of gross domestic product (GDP) last year, the fourth year in a row it has breached the EU's 3.0-percent ceiling.