( CNN ) -- Europe 's leaders warned 2012 was likely to be tougher than 2011 , when spiralling borrowing costs forced political change in Italy and Spain and threatened the survival of the euro . In a sombre address on national television Nicolas Sarkozy , president of France , said the gravest crisis Europe has faced since the second world war `` is not over '' and Angela Merkel , German chancellor , told German voters `` next year will no doubt be more difficult than 2011 '' . The euro crisis in 2011 forced borrowing costs higher for Italy and Spain and led to the dismissal of Silvio Berlusconi 's centre-right government in Rome and the fall of the Socialist administration of JosÃ© Luis RodrÃ­guez Zapatero in Madrid . It also undermined sentiment in the euro which had a second consecutive year of losses against the dollar and fell to its lowest level in a decade against the yen . Speaking on national television on Saturday , Ms Merkel said Europe was experiencing its `` harshest test in decades '' but would ultimately be made stronger by the crisis . Mr Sarkozy , who is facing a tough re-election campaign later this year , said French voters were more anxious at the end of the year than they were at the beginning . `` This extraordinary crisis , without doubt the gravest since the second world war , is not over ... you are ending the year more anxious for yourselves and your children . '' Europe 's political leaders will begin talks later this month to amend the intergovernmental pact agreed by all 27 members of the European Union , except the UK , at a summit in Brussels last month . Mr Sarkozy and Ms Merkel are due to meet on January 9 to discuss a series of amendments to the proposals , including the creation of a `` road map '' for commonly-issued eurozone bonds in a new European treaty on fiscal discipline . The state of Italy 's public finances were at the centre of Giorgio Napolitano 's New Year address . The president of Europe 's third-largest economy urged Italians to make sacrifices to rescue the country 's public finances . `` Sacrifices are necessary to ensure the future of young people , it 's our objective and a commitment we can not avoid , '' he said . `` 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 . '' Italy , the world 's third-largest bond market , is seen by many investors as the barometer for the eurozone debt crisis and faces a crucial opening to the year with auctions of more than â‚¬100bn in the first quarter alone . Mario Monti , the new prime minister of Italy , said in his end-of-year address last week that Italy had hauled itself back from the `` edge of the precipice '' but he said more needed to be done to reform labour markets and the service sector to restore competitiveness to the stalling economy . In Greece , Lucas Papademos , the new technocratic prime minister , also warned of a difficult year ahead . `` We have to continue our efforts with determination , so that the sacrifices we have made up to now wo n't be in vain , '' he said in a televised address on Saturday .
French president said the gravest crisis Europe has faced since the second world war `` is not over '' German chancellor told German voters `` next year will no doubt be more difficult than 2011 '' The president of Europe 's third-largest economy urged Italians to make sacrifices . Spiraling borrowing costs forced political changes in Italy and Spain , and threatened the euro .