GERMANY / BRITAIN: German Chancellor Angela Merkel stressed her country's commitment to maintain close relations with Britain and France last night, after some two hours of talks with Prime Minister Tony Blair in Downing Street.
As expected, the newly-installed chancellor yesterday declined to take sides in the continuing EU budget row.
Insisting that she wanted "to have success", Dr Merkel diplomatically asserted: "The situation of each country has to be taken into account. If anyone forgets one country with its interests, we will not have any success."
However - while confirming this was "an introductory meeting" and not a negotiation - the mood music around the Number 10 discussions prompted one senior Downing Street source to suggest they might actually have increased the prospects for a successful conclusion to Britain's EU presidency and a surprise budget deal.
"It's obviously going to be difficult," said the source, "but that is what we will be discussing behind-the-scenes over the next three weeks."
Dr Merkel declined to speculate about the possibility of an agreement in time for next month's Brussels summit, saying: "I do not really want to look into the crystal ball. We have three weeks left. Everybody will want to make their contribution and then we will see."
Following her meeting with French President Jacques Chirac in Paris on Wednesday, Dr Merkel said of yesterday's diplomatic mission: "With this visit I want to underline that Germany and the new German federal government has a great interest in maintaining good friendly relations with France, but not just with France but particularly with the United Kingdom."
Encouraged by Dr Merkel's similar attitudes to the challenges of globalisation, and her desire to heal the rift between the US and Germany over the Iraq war, Mr Blair said he looked forward to developing "a very good and close working relationship" with her.
He said Britain remained committed to trying to secure a budget deal and would use its best endeavours to that end at the December summit. Ministers and officials, he said, would be trying their "level best" to break the impasse over the British rebate and French opposition to the overhaul of the Common Agricultural Policy and cuts in EU farm subsidies.
Dr Merkel confirmed that she and Mr Blair "discussed the full range of issues as you might expect to do with Europe".
Earlier yesterday Polish Prime Minister Kazimierz Marcinkiewicz, who also met Mr Blair, disclosed that the new EU members from Eastern Europe had written a joint letter calling on EU members to overcome "selfishness" and show "solidarity" in an effort to resolve the budget issue.