New Year cheer from German Chancellor Angela Merkel as she warns that the economy in 2013 "will be even more difficult." Her words contradict those of Finance Minister Wolfgang Schäuble who said "I think we have the worst behind us."
Angela Merkel faces a difficult year ahead as German elections loom in September, whilst the mantle of the eurozone crisis sits squarely on her shoulders. Ekathimerini reported in her New Year address Merkel implored for further patience as she said "The crisis is far from over."
In contrast Wolfgang Schäuble has struck a positive note on the euro crisis, declaring "we have the worst behind us." (Der Spiegel) However Merkel's pessimism has more of a ring of reality than Schäuble's sudden optimism.
Whilst most analysts believe Greece will remain in the eurozone at least until German elections are over, thus limiting the ensuing contagion of a Grexit, Spain's economy remains critical. Italy faces elections in Spring which could see a turn against the austerity measures imposed by unelected technocrat Mario Monti, and the possibility of a debt crisis looming in France could bring the whole house of cards down.
Merkel has warned the German electorate that things could be more difficult this year and there are reports that they will be exposed to their own dose of austerity following elections. Indeed, Christine Lagarde, head of the International Monetary Fund and advocate of fiscal austerity in Mediterranean countries, has warned Germany not to press ahead with measures that would hit the German economy.