German Chancellor Angela Merkel says financial problems in the eurozone could be Europe’s biggest crisis since World War Two, and she called for greater – rather than less – European integration to meet the challenge.

Ms. Merkel, who lead’s Europe’s strongest economy, told party members on Monday that a united Europe could fail if the 17-nation “eurozone” that uses a common currency breaks up over debt problems in Greece, Italy and other weaker economies. She called for stronger European political integration and an overhaul of the treaties that govern the EU.

The German leader’s comments came as new leaders in Italy and Greece worked to overcome massive debt and slow growth that some analysts have said threaten the eurozone.

Italy was able to borrow more than $4 billion in a new bond sale on Monday. The interest rate for the five-year bonds was the highest since 1997, but analysts said the good response to the sale and gains in Asian stock markets indicated that investors have more confidence in Italy since economist Mario Monti was named to be prime minister.

Mr. Monti said Sunday he will work quickly to form a new government, as he tries to lead the eurozone’s third largest economy out of a debt crisis.

The prime minister-designate must present the names of his Cabinet ministers to Italian President Giorgio Napolitano before he can be sworn in. He is expected to announce his choices Monday.

Mr. Monti, a former European Union competition commissioner, received support for the top job from major opposition parties and some members of former prime minister Silvio Berlusconi’s ruling center-right PDL party.

Mr. Monti has never held elected office in Italy and does not represent any Italian political party. He would lead the country until the next elections, due by 2013.

The new government faces the challenge of implementing a major austerity package approved by parliament in the past week to reduce the country’s huge public debt. EU leaders welcomed the news of Mr. Monti’s appointment, saying it is an “encouraging sign,” but promised to keep monitoring the situation in Italy.

EU leaders have been pressuring Italy to cut public spending to avoid becoming the latest eurozone member to request a bailout. EU officials worry that the Italian economy is too big to be rescued, and they fear its demise would be a major blow to the euro.