"We had an open and friendly meeting, building on a long history of transatlantic relations," Merkel said, adding that she had indicated two key objectives being pursued by the German government, i.e. economic reform and the further development of Germany's role as a reliable partner in the world.

Dispute with Iran to be settled peacefully
 

Bush noted that the German government and his administration are in agreement that the nuclear dispute with Iran should be resolved by diplomatic means.

Merkel indicated that Iran's actions are making it necessary for the 'EU 3', the group of European countries that has been trying to negotiate a solution (France, the United Kingdom, and Germany), to work together more closely with the United States. "From the German point of view the things Iran is saying with regard to the Holocaust and Israel's right to exist are totally unacceptable," she said.

On January 12 the 'EU 3' agreed to ask the International Atomic Energy Agency (IAEA) Board of Governors to refer the matter to the UN Security Council.

Bush observed that Germany has played an incredibly constructive role in the diplomatic process triggered by the conflict. Merkel announced that she will seek a broad consensus in addressing Iran. "It will not fail to have an effect if a very large number of countries express their disapproval," she said.

'Partnership in Leadership'

In discussing the foreign policy area Merkel underscored Germany's responsibility in the world, saying that countries sharing Western values need to assist each other.

Merkel observed that reunification was made possible by the fact that Germans had firmly believed in democratic values for more than forty years. "The offer of a 'Partnership in Leadership' made by President Bush senior was a fantastic offer, which I think we Germans will need to continue to take to heart in the years ahead," she said.

Joint effort against terrorism

Merkel referred to terrorism as a key threat in the 21st century. She noted that there are differing views as to appropriate ways of handling this threat, as evidenced by Guantanamo, but that Germany and the United States are in full agreement in their assessment of the nature and gravity of the threat.

Reiterating what she said in her speech on January 12, Merkel underscored the outstanding importance of the NATO alliance in the security policy area, adding that the transatlantic alliance is the forum in which policy and strategy issues need to be discussed.

Bush thanked Germany for its military presence in Afghanistan as well as for the help it is providing in Iraq. He said that despite differing views, which he understood, Germany is providing important assistance in the reconstruction effort.

Combining social interests with economic strength

Speaking in the context of the strong trade relations that exist between the two countries, Merkel stated that she will seek to improve Germany's economic situation and that in her view it is important to combine social interests with economic strength. She indicated that in the age of globalization Germany cannot consider economic isolationism and, instead, must be open to competition.

Good beginning for intensive relations

Merkel assessed her open exchange of views with President Bush as a good beginning for regular and intensive communication with one another. "In a year you can ask me again how much of this new chapter has been written and if anything needs to be added to it," she said.