Merkel steels Germans for ‘more difficult’ 2013

 AP PHOTO/MARKUS SCHREIBER

BERLIN – Chancellor Angela Merkel warned Germans that the economy, Europe’s biggest, would experience a harder time next year than in 2012 and cautioned too that the eurozone debt crisis was far from over.

In her annual New Year address published Monday, Merkel said: “In fact, the economic environment next year will not be easier, but more difficult”, adding: “The crisis is a long way from being beaten.”

Although top exporter Germany has managed to hold up to the crisis fairly well, growth has slowed here as well since the beginning of the year.

After expanding by 0.5 percent in the first quarter of 2012, gross domestic product (GDP) grew by just 0.3 percent in the second quarter and a mere 0.2 percent in the third quarter.

And in October, the government slashed its forecast for economic output next year to 1.0 percent, compared to 1.6 percent previously anticipated.

The country’s gloomy central bank has said Germany may even flirt briefly with recession early next year.

The Bundesbank also forecast that Germany would only grow by a meager 0.4 percent next year.

Nevertheless, “it has been possible this year to have the lowest unemployment and the highest level of employment since the reunification” in 1990, Merkel recalled.

And a slowdown next year “should not leave us discouraged but should spur us on”, said the chancellor, according to the text of her speech released in advance by her office.

Turning to the eurozone’s efforts to tackle its three-year debt crisis, she judged that “the reforms that we have decided are beginning to work”.

“However, we still need more patience. The crisis is a long way from being overcome.”

She appeared more pessimistic than other eurozone leaders such as France’s President Francois Hollande or even her own finance minister, Wolfgang Schaeuble, both of whom have declared the worst of the crisis over.

In an interview with mass circulation Bild last week, Schaeuble said: “I think the worst is behind us”, citing positive developments in Greece and France.

Hollande has repeatedly said the eurozone crisis, which has at times threatened the very existence of the 17-country currency union, was past.

Merkel also called for better supervision of the financial markets, stressing: “The world has still not sufficiently learnt the lessons of the devastating financial crisis of 2008”.

“Never again should such a lack of responsibility assert itself as before. In the social market economy, the state is the guardian of order and people have to be able to have confidence in that,” added the chancellor.