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

In her annual New Year address published yesterday, 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 last year.

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

And in October, the Government slashed its forecast for economic output this year to one per cent, compared to 1.6 per cent previously anticipated.