Brussels has urged Italy and Spain to redraft their tax and spending plans or risk breaching eurozone debt rules in 2014.

The two countries were singled out for criticism in the first report issued as part of the so-called Two-Pack process, under which countries in the single currency area agreed to far closer scrutiny of their economic policies.

The censure came just a day after Spain announced that it would leave the €41bn (£34bn) EU bailout programme it has drawn on to rescue its teetering banks.

In the more stringent surveillance regime adopted since the financial crisis, the single currency's 17 member countries are now required to submit an annual draft budgetary plan, detailing spending totals and proposed economic reforms, to be picked over by Brussels.

Countries are required to keep budget deficits below 3% of GDP, and debt levels below 60%, under the eurozone's Stability and Growth Pact – though those targets were widely ignored in the runup to 2008. More than half of member countries are currently in an Excessive Debt Procedure, which sets a time limit for them to get their budgets back on track.

Italy and Spain are widely seen in financial markets as the most likely candidates to be forced to seek help from the European Central Bank's (ECB) emergency bailout scheme, known as "outright monetary transactions" in the coming years. Both countries were invited by Brussels to "take the necessary measures within the national budgetary process" to prevent them busting the targets.

Italy's finance ministry protested after the commission's judgment: "In formulating its opinion, the commission does not take into account important measures announced by the government."

Several other countries were also censured by Brussels on Friday as part of its "autumn fiscal surveillance package". France, whose economy has slipped into reverse, according to growth figures released this week, was accused of making limited progress on the structural reforms, such as changes in labour market regulations, recommended by the commission.

Germany, which has already been accused by its European partners – and the US Treasury secretary Jack Lew - of saving too much, and spending too little, was told that it had made no progress in structural reforms.

"As soon as a new federal government takes office, national authorities are encouraged to submit an updated draft budgetary plan," Friday's report said.

Croatia was also warned that it may face action under the Excessive Deficit Procedure for breaking deficit limits.

With both growth and inflation in the eurozone slowing – the latest official figures released on Friday confirmed that inflation was just 0.7% in the year to October – the commission's verdicts will add to an increasingly fraught debate in Europe about how best to manage the eurozone's 17 economies.

Some countries, including France, believe the euro is too strong on foreign exchange markets, jeopardising exports; but after last week's quarter-percentage point rate cut, Germany is reluctant to see further moves by the ECB that might help to guide the euro downwards.

The European commission also urged countries across the eurozone to beware of slashing public investment as they battle to balance their budgets, and focus instead on cutting day-to-day government expenditure. "The general trend of decreasing public capital expenditure observed in the past few years, while stabilising, is not being reversed," it said.

In aggregate, across the 17 member-countries, the commission expects spending cuts worth 0.25% of eurozone GDP to be implemented in 2014.