2012 to be difficult says Merkel, but reasons for confidence

Germany Chancellor Angela Merkel warned of a difficult year ahead, particularly for the eurozone, but also said there were good reasons to be confident, in New Year greetings released Saturday. "Germany is doing well, even if next year will no doubt be more difficult than 2011," Merkel said in a speech to be broadcast Saturday evening, the text of which AFP received in advance. Merkel said that 2011 had been marked by major upheavals such as the Arab Spring and Japan's nuclear disaster at Fukushima which eventually prompted Germany to phase out nuclear power by 2022. But Europe had also suffered upheaval, she added. "Here, the debt crisis is still keeping us in suspense," she said. Merkel also mounted a defence of the European project. Detailing what it had offered the continent over the past 50 years, she listed: "Peace, freedom, justice, human rights and democracy." Europe, she insisted, was growing through this crisis, even if "the path to overcome it remains long and will not be without setbacks. "At the end of this path however, Europe will re-emerge stronger from the crisis that it was when it entered it," she argued. "In Germany, we have good reasons to be confident," she said, arguing that the country's economic competitiveness had suffered less than its European partners, with the jobless rate in particular at its lowest in 20 years. The German economy in 2012 is forecast to grow between 0.5 percent and 1.0 percent, much lower than the three percent expected in 2011. It could avoid negative growth and recession predicted earlier by economists for this winter. One study, by the Allensbach institute published on Thursday showed that 49 percent of Germans were optimistic for 2012, against 17 percent who declared themselves pessimistic and 26 percent sceptical. The results attracted attention because over the past 12 years of the poll, the optimists have outnumbered the pessimists and sceptics on only four occasions.