BRUSSELS - THE EU's top economy official warned Thursday that heavy government spending to deal with the economic crisis may eventually force Europe to cut back its expensive social safety net.

Joaquin Almunia, the European Union's economic and monetary affairs commissioner, said the social spending that helps people now could compromise state finances in the long term and will likely lead to reassessment of benefit levels.

'Even when growth is restored, we cannot expect a return to business as usual,' he told a European Commission's Brussels Economic Forum conference.

Unemployment benefits and free health care for people on low incomes act as automatic stabilizers for the economy, since they increase in tough times and thus provide economic stimulus during troughs in the business cycle. They vary widely across Europe, with some nations paying the recently unemployed most of their full former salary for a limited time.

The rising number of jobless will hit the public purse hard, with the EU predicting that some 8.5 million jobs will disappear this year and next year. Ireland has already been forced to plug a gap in its social welfare fund this year and other nations see debt and deficits soaring.

Mr Almunia warned that the weak recovery the EU expects would mean that governments will have to withdraw state support from slowly growing economies with high unemployment - and without the booming financial services sector that helped fuel the bubble in some countries.

'The crisis may leave us with a potentially subdued growth potential, high unemployment and public finances under severe strain,' he said.

'It is unlikely that the financial sector will be the engine of growth that it has been over the last decade. Financial institutions will be less leveraged, more risk averse and will have to adapt to new capital constraints,' he said.

Longer-term costs will also bear down on public spending, he said, as Europe pays out more on welfare and health care for the rising number of elderly, risks losing business to lower-wage economies elsewhere and tries to protect itself against climate change.

'We need to tackle these issues right away,' he said. 'We cannot wait until the end of the crisis.' -- AP