Euro zone growth risks lasting dent, ministers told

* Euro zone potential growth to fall below 1 pct - Juncker

* Low growth, high joblessness pose risks of social crisis

* Difficult exit from fiscal stimulus

* Inflation may reach ECB target in few months - Almunia

By Marcin Grajewski and Tamora Vidaillet

BRUSSELS, July 6 (Reuters) - Euro zone finance ministers discussed fears on Monday that the currency area's ability to grow economically would fall dramatically after the downturn, with high unemployment posing a threat of social crisis.

Eurogroup chief Jean-Claude Juncker said the 16-nation currency area's potential growth, or the highest expansion sustainable over time, could fall below 1.0 percent this and next year from 2.2 percent recorded before recession struck.

"There is a high probability that because of the crisis the euro area will suffer a potential permanent loss of future growth," Juncker told a news conference.

"Potential output in the euro area could fall from 2.2 percent to less than 1 percent in 2009 to 2010. The loss will be all the greater if the determined corrective measures of governments are not strong enough."

Juncker and European Union Monetary Affairs Commissioner Joaquin Almunia said the worst appeared to be over for the euro zone but any recovery from the deepest economic crisis since World War Two was likely to start only in 2010.

The euro zone's economy contracted by a record 2.5 percent in the first three months of 2009 quarter-on-quarter.

The euro zone's unemployment rate is bound to increase from May's 9.5 percent and persist over a longer period, hitting hard the poorest in society, Juncker said.

"The rate of employment is likely to fall, unemployment is likely to rise ... the risk is that we shall move towards a genuine social crisis," he said.

Unemployment is forecast by the European Commission to hit 9.9 percent this year and 11.5 percent next year in the euro zone from 7.5 percent in 2008, a crisis-trigger turning point after several years of major declines.

DIFFICULT EXIT FROM SPENDING SPREE

He added low potential growth would make it difficult for euro zone governments to cut budget deficits swollen by fiscal stimulus programmes waning tax revenues.

The EU has a deficit ceiling of 3.0 percent of gross domestic product, but the Commission expects 21 of the bloc's 27 countries to exceed the limit this year.

"Our capacity to grow without imbalances is being diminished by the crisis ... lower potential growth will constrain the room for manoeuvre for fiscal policies in the near future," Juncker said.

The time has not yet come, he said, to start withdrawing from fiscal stimuli, which involve pumping hundreds of billions of euros into crisis-hit banks and pro-growth projects.

"We have not reached (a point) at which the exit strategy could be applied. The economic indicators suggest the worst is now behind us. As soon as we see some sort of budgetary recovery, budgetary consolidation should resume."

At their monthly meeting, the ministers concluded that the current fall in consumer prices was no reason for concern, as in a few months inflation could return to the European Central Bank's target of slightly less than 2.0 percent.

"In a few months' time we expect to see inflation very close to the price stability objective," Almunia said.

He added that in the medium term, inflationary risks could appear, especially if energy prices continued to rise. (Additional reporting by Timothy Heritage, Dave Graham and Bate Felix; Editing by Brian Love and Dale Hudson)