The ministerial meeting was the first since Merkel took office in November as head of Germany's grand coalition government of Christian and Social Democrats. The gathering was intended to prepare a joint Franco-German strategy for next week's EU summit in Brussels on the modernization of Europe's economy.

German and French leaders on Tuesday reiterated their resolve to maintain and deepen their excellent bilateral ties which had been given a significant boost by Chancellor Angela Merkel's predecessor, Gerhard Schröder.

Along with Britain, the two countries have been at the forefront of efforts to settle the dispute over Iran's nuclear ambitions through diplomatic means. France and Germany have also been pushing EU member countries to agree on a military mission in support of UN peacekeepers in the Democratic Republic of Congo (DRC). Merkel said on Tuesday the two nations were prepared to be part of such a mission.

"I only want to say that France and Germany are agreed on the conditions for such a mission, including a UN mandate and the willingness of the Congolese government to accept a contingent from the EU," she said. "It's also important to clearly define the length of the troops' stay in the DRC. We believe that if such a mission comes about, it would have the active support of a great number of EU member countries."

More bilateral cooperation

France and Germany also agreed to cooperate more closely in shaping a joint energy safety policy, the aim of which is to decrease dependence on single energy suppliers and markets.

"I'd like to thank the chancellor for her warm welcome and the efforts of her delegation to arrive at a joint energy policy within the European Union," said Chirac. "We'll have to debate the issue further with a view to ensuring that such a policy is in line with safety requirements and environmental considerations."

Both countries are also willing to better share information on motorists who break traffic regulations by linking electronic databases. The leaders also addressed a number of issues related to the integration of young migrants in western societies. France was rocked by urban riots last November, while in Germany, a decades-old policy of multiculturalism has shown serious flaws.

"We've heard several reports about the importance of integrating young foreigners into our societies," Merkel said. "We all know about our current problems on this front, and we've decided that we'll have a large meeting in October with French and German migrants to look at the root causes of discontent and anger."

Dispute over protectionism

The Franco-German ministerial meeting was overshadowed by disagreement over France's industrial policies which some German policymakers called protectionist. The dispute centers on a move by Paris to rubberstamp the merger of French utility giant Suez and state-owned Gaz de France in an attempt to fend off a potential takeover bid from the Italian Enel group.

Merkel's chief aide, Thomas de Maiziere, had described the move as contrary to European legislation. And conservative German Economics Minister Michael Glos added that forced mergers did not belong in a market economy. French leaders hit back, saying that their country was not protectionist at all, as it ranked among those countries which attract the larger shares of foreign investment.

French Prime Minister Dominique de Villepin was unable to take part in the Berlin gathering, as his presence was required in France because of ongoing student protests over a controversial new labor law.