London - The European Union (EU) risks facing a "decade of retrenchment" and high unemployment unless 10 million new jobs are created by 2014, British Prime Minister Gordon Brown has warned.

In a letter to Fredrik Reinfeldt, the current EU Council president, Brown urged a new direction in Europe on the issues of employment and growth.

"We must now put Europe on a different course. We need - as a matter of urgency - a new European compact for jobs and growth to tackle the concerns of Europe's citizens at the same time as we take steps to reform the effectiveness of our insitutions," Brown said.

The letter, released by the government Wednesday, was aimed to coincide with the EU summit in Brussels this week.

"For all of us restoring strong, sustainable and balanced growth remains the most critical challenge we face. Otherwise we risk a decade or more of retrenchment, low growth and high unemployment," Brown wrote.

"This is an important moment for Europe," he added, as Europe needed to prove that it could play its part in leading the global economy out of recession.

The risk of much lower world and EU growth as a result of a drop in consumption in the US and other economies, a contraction of investment and job losses would mean that "Europe would once again lag behind, damaging the living standards and prosperity of all of our citizens."

"Europe must focus on creating jobs and equipping our workforce with the skills they need to succeed in the jobs of the future," urged Brown.

"We need to set an ambitious, yet realistic, target to create 10 million new jobs by 2014, ensuring that 2 million of these jobs are in low-carbon industries," he said.

The objective should be to increase the number of people in employment through the use of flexible measures and by facilitating the free movement of labour across Europe must by improving information and advice on job opportunities and recognition of qualifications in other EU countries, said the letter. (dpa)