Merkel warns Germans of tough economic times ahead

Chancellor Angela Merkel has warned that the German economic climate in 2013 will be "even more difficult".

In her new year message, she also cautioned that the eurozone debt crisis was far from over.

However, she did say that reforms designed to address the roots of the problem were beginning to bear fruit.

Her comments appeared to contradict German Finance Minister Wolfgang Schaeuble who said last week that the worst of the crisis was over.

In a taped interview to be broadcast later on Monday, Mrs Merkel urged Germans to be more patient.

"I know that many people are naturally concerned going into the new year," she said.

"The economic environment will not in fact be easier but rather more difficult next year. But we shouldn't let that get us down; rather it should spur us on."

She linked future German prosperity to a prosperous European Union.

"For our prosperity and our solidarity, we need to strike the right balance," she said.

"The European sovereign debt crisis shows how important this balance is.

"The reforms that we've introduced are beginning to have an impact. Nevertheless we need to have further continued patience. The crisis is far from over."

In an interview with the German newspaper Bild last week, Mr Schaeuble cited positive developments in Greece and France, saying: "I think the worst is behind us."

Germany - Europe's largest economy - has been the paymaster in the eurozone crisis, a move unpopular with many German voters and some conservative MPs in Mrs Merkel's coalition.

Analysts say most Germans remain wary of eurozone bailouts but generally approve of Mrs Merkel's handling of the crisis.

In October, the German government slashed its forecast for economic output in 2013 to 1.0%, compared to 1.6% previously anticipated.

The country's central bank has said Germany may even come close to recession early in the new year.

Nevertheless, Mrs Merkel underlined that Germany in 2012 had the lowest unemployment since reunification in 1990.