German Chancellor Merkel, in her sombre New Year message yesterday, warned 2012 will be worse than 2011.
Merkel said Europe was experiencing its ‘most severe test in decades’.
Meanwhile, French President Sarkozy said the crisis was not finished, and Italy’s President Napolitano called for more sacrifices.
With the country’s EU-imposed prime minister, Mario Monti, leading a cabinet of unelected experts, Italy’s Napolitano said: ‘Sacrifices are necessary to ensure the future of young people, it’s our objective and a commitment we cannot avoid.
‘No-one, no social group, can today avoid the commitment to contribute to the clean-up of public finances in order to prevent the financial collapse of Italy.
‘The sacrifices will not be in vain, especially if the economy begins to grow again.’
Another imposed technocrat, Greek Prime Minister Lucas Papademos, said in his TV address: ‘We have to continue our efforts with determination, so that the sacrifices we have made up to now won’t be in vain.’
The EU leaders’ new year messages came as leading economists said they expect a return to slump in Europe in the first half of 2012.
The cost of borrowing for some of the eurozone’s largest economies, including Italy and Spain, has shot up in recent months as bankers fear governments will not be able to pay back the money they have already borrowed.
In her TV address, Merkel said that despite Germany’s relatively good economic situation, ‘next year will no doubt be more difficult than 2011’.
She added: ‘The road to overcome it (the debt crisis) remains long and not without setbacks, but at the end of this path Europe will re-emerge stronger from the crisis than it was when it entered it.’
She defended the euro, saying it had made ‘everyday life easier and our economy stronger. . . and protected from something worse’ in the financial crisis of 2008.
In his televised address to the French, Sarkozy said he was intent on agreeing reforms at a January 18 meeting with unions that could bolster employment and economic competitiveness.
He also said he wanted taxes on imported goods to help fund France’s welfare state, currently financed by company and income taxes.
He hoped to agree ways to have unions and management cooperate on bringing more flexibility to the job market to stem rising unemployment, much as Germany did from 2003.
He said: ‘I know that the lives of many of you, already tested by two difficult years, have been put to the test once more.
‘You are ending the year more worried about yourselves and your children.’
After imposing two deficit-cutting packages aimed at saving a total of 72 billion euros ($93 billion) since August, Sarkozy promised no new austerity measures would be announced in 2012.
He added: ‘The problem is not one of a new package of spending cuts in the coming year. The government has done what needed to be done.’
