LEAD: Merkel backs EU deal, pushes China on Iran

Feb 2, 2012, 5:44 GMT

Beijing - German Chancellor Angela Merkel said the European Union was 'on track' to financial recovery on Thursday, as she began a two-day visit to China on which she was expected to seek China's help with the eurozone crisis.

The euro had 'made Europe stronger' and EU members were convinced that an agreement on Monday to limit overspending had put them 'on the right track' to financial recovery, Merkel said before scheduled talks with Premier Wen Jiabao.

Merkel discussed economic and financial policy in her speech at the Chinese Academy of Social Sciences (CASS), a state-run think-tank.

In other remarks, she urged China to press Iran to be more 'open and transparent' about its nuclear programme.

Merkel also said the United Nations Security Council, of which China is one of five veto-holding permanent members, should speak out against human rights abuses in Syria.

Her talks with Wen on Thursday and President Hu Jintao on Friday were also expected to cover a wide range of international economic and political issues, while German officials said Merkel would raise concerns over China's recent human rights record.

State media on Thursday warned that China was unlikely to purchase large volumes of European bonds unless the European Union could demonstrate greater unity on reforming its financial system and spurring growth.

'The EU has a unified currency, but it doesn't have a unified finance system to ensure every country sticks to its promise to cut their deficits,' the Global Times newspaper quoted Shen Jiru, a CASS researcher, as saying.

But Shen said Merkel shared 'a similar idea with China that European countries have to take reforms before outside help can come in.'

Her visit was 'a good opportunity for her to explain to Chinese leaders and investors how the EU will handle the crisis,' he was quoted as saying.

Merkel was accompanied by a large business delegation and planned to visit German companies in the southern province of Guangdong on Friday.

The visit is her fifth to China in the seven years she has been Germany's chancellor.

Read more about Germany