Germany to work for strong euro: Merkel

(JEDDAH) - German Chancellor Angela Merkel said on Wednesday her country would push "with all our strength" for a strong euro, saying Germany had been a prime beneficiary of the single European currency.

"I want to (make) a very clear statement," she told a gathering of German and Saudi businessmen in the Saudi Red Sea city of Jeddah on the second stop of a four country Gulf tour that took her to neighbouring Qatar later in the day.

"Germany as the largest exporting nation, the largest economy in the European Union, has strongly benefited from the euro in the past."

"Therefore, we will work with all our strength for a strong euro."

But Merkel added that to shore up the currency and boost European competitiveness, the euro countries had to be aligned on the side of the regions fittest economies, and not the weakest.

"That is the goal that Germany is pursuing. If we do not achieve this goal, we will not be competitive in the world," she said.

After arriving in the Qatari capital Doha, Merkel said "we want to create the conditions for a stable currency" and added "we must contribute to solidarity within the European Union."

Merkel also said while in Jeddah that she was determined to see through a successful EU-Gulf free trade agreement, under negotiation for many years.

"We have now been overtaken by some Asian countries," which moved faster to reach trade pacts with the six-nation Gulf Cooperation Council, she said.

"I am committed personally now to overcoming the last millimetres" to conclude an agreement.

Merkel made no reference to comments by GCC Secretary General Abdulrahman al-Attiyah on Tuesday that talks on a trade deal had been suspended because of Europe's not giving ground.

"In the absence of any progress and because the European side insists on its previous positions, GCC countries have suspended negotiations" on the free trade agreement, Attiyah said.

The GCC official did not cite specific issues, but the two sides have long disagreed over Europe's desire to include human rights-related clauses, and problems over certain import tariffs maintained by Gulf countries.

Meanwhile, Merkel told Saudi officials and businessmen at the Jeddah Chamber of Commerce that she would work to clear up barriers to bilateral investment and trade, which is strongly in Germany's favour.

She and her entourage held closed-door meetings with Saudi businessmen and, separately, Saudi businesswomen on Wednesday.

Late on Tuesday, she met King Abdullah to discuss bilateral and regional issues including the Iran nuclear problem and the Palestinian-Israeli peace talks.

She told reporters early on Wednesday that Abdullah was "very disappointed about the progress so far of the Middle East peace process."

After visiting the United Arab Emirates and Saudi Arabia, Merkel departed from Jeddah Wednesday for Doha and is to travel to Bahrain on Thursday before returning to Germany.