“Greece is in a terrible state,” Oxfam has said as a new report by the international aid agency warns that about 146 million Europeans, almost a third of the Continent's population, will be trapped into poverty by 2025 as a result of austerity policies across the region.

“The European model is under attack from ill-conceived austerity policies sold to the public as the cost of a stable, growing economy, for which all are being asked to pay,” said the report which is set to be published Thursday.

“Left unchecked, these measures will undermine Europe's social gains, creating divided countries and a divided continent, and entrenching poverty for a generation,” the document said.

Austerity has helped Greece cut its primary deficit by 9.2 percent of gross domestic product in 2010-2012, one of the largest fiscal improvements recorded worldwide.

The achievement however has come at a cost of mammoth unemployment and a deep economic recession-cum-depression, now in its sixth year.

“We were founded in 1942 because of the famine in Greece; no one would have believed we would be here more than 70 years later, saying, Greece is in a terrible state,” Max Lawson, Oxfam's head of advocacy said in a statement.

"The UK, Greece, Ireland, Italy, Portugal, Spain – countries that are most aggressively pursuing austerity measures – will soon rank amongst the most unequal in the world if their leaders don't change course,” he said.

The charity urged European Union finance ministers who are due to meet in Lithuania to take action to reverse the trend.