Speaking after meeting potential sponsors at her office in Berlin on Tuesday, Merkel said the German government fully supported Munich's 2018 bid.

"We believe that we have extremely good chances of getting the Olympic Winter Games in the Munich region," Merkel said. "The bid is of national significance."

Referring to the euphoric mood in Germany when the country hosted the FIFA World Cup 2006, the chancellor said that playing host to such important sporting events has helped raise Germany's international profile.

"Such sporting events have always given us a clearer picture of our country as a happy, involved and competent nation," Merkel said.

She added that the Winter Olympics could serve as a showcase for Germany's progress in environment protection as well as energy-efficient and modern technologies.

Munich hoping to drum up financial support

The 1972 Summer Games in Munich were the last Olympics in the country - with Berlin and Garmisch-Partenkirchen hosting the summer and winter editions, respectively, in 1936.

Berchtesgaden failed to attract the 1992 Winter Games, while Berlin and Leipzig didn't come close to winning their bids for the 2000 and 2012 Summer Games.

According to a report by the German daily Suedeutsche Zeitung, Munich needs around 30 million euros from sponsors to fund its Olympic bid.

Representatives from Adidas, Allianz, Deutsche Post, Siemens, RWE and TUI were invited for Tuesday's meeting with Merkel.

Horst Seehofer, Bavaria's state premier, said he was confident the city would manage to raise enough funds to finance its bid.

The minister said he had received "encouraging signals" from industry despite the economic slump.

Thomas Bach, vice-president of the International Olympic Committee (IOC), said he was optimistic about Munich's chances seeing that Germany was fully committed to supporting the city's bid.

"That will make an impression internationally," Bach said.

Munich is to hand in its official bid in October of this year. Other rivals include the French city of Annecy and Pyeongchang in South Korea.

The winning bid will be announced in 2011 at an IOC session in South Africa.

sp/AP/dpa/AFP
Editor: Trinity Hartman