She also spoke of the importance of relations with France as she made whirlwind trips to Paris and Brussels.

She reiterated German support for a European constitution, despite its rejection by voters in France and the Netherlands earlier this year.

Mrs Merkel was speaking on her first full day as leader of Germany.

She is due to visit London on Thursday, where the European Union's unresolved budget is likely to top the agenda.

While in Brussels, she made a trip to Nato headquarters where she called for a common political purpose among member states following disputes over the Iraq war.

"Nato should be the place where people turn first with member states to discuss political issues," she said.

Franco-German axis

Mrs Merkel began her day with a trip to Paris, making her the third consecutive German chancellor to make France the first stop abroad.

Merkel has won the chancellorship but not the future

Speaking alongside French President Jacques Chirac, she said strong ties with France were vital for both countries and for the EU as a whole.

President Chirac greeted Mrs Merkel at his Elysee Palace residence, thanking her for making Paris her first destination as chancellor. He described her visit as a sign of friendship despite a "difficult common history".

"This is not about ritual, it about a deep conviction that a strong relationship between Germany and France is both necessary and beneficial to Europe," Mrs Merkel said.

EU wrangling

On the issue of the EU budget, which came up during her stop in Brussels, Mrs Merkel emphasised the importance of finding a solution.

She was asked several times if Britain should give up the large rebate it gets from the EU after making its contribution to the budget - as the rest of the EU wants.

She said Britain's rebate was only one part of "the whole compendium" of financial issues to be resolved.

Mrs Merkel's room for manoeuvre in foreign policy is tightly circumscribed by the agreement she has entered into with her coalition partners, the Social Democrats, the BBC's Jonny Dymond in Brussels says.

Also on Wednesday, Mrs Merkel stopped short of backing Turkey's bid to join the EU, but said a "close strategic connection" was needed.

She said membership negotiations would be a "long process", and said she has told Turkish politicians that closer integration must be of benefit both to Turkey and the EU.

Mrs Merkel's conservative Christian Democrats (CDU) have been cool towards Turkey's EU aspirations.