Angela Merkel outlines plans for European Health Union

Speaking at the virtual Davos World Economic Forum on Tuesday, the German Chancellor downplayed the US President’s call for Europe to pick sides between the US and China. She said: “I would very much wish to avoid the building of blocs. I don’t think it would do justice to many societies if we were to say this is the United States and over there is China and we are grouping around either the one or the other.

“This is not my understanding of how things ought to be.”

Mrs Merkel went on to say she “agreed” with Chinese President Xi Jinping.

“The Chinese president spoke yesterday, and he and I agree on that. We see a need for multilateralism,” she said.

But she quickly moved on to question the Chinese leader’s call for more transatlantic cooperation to avoid new “cold wars”.

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She said: “But there is one question where we are not in immediate agreement.

“Probably the question of what it means when you have different social models.

“When does interference begin and where does it end? When do you stand up for elementary values that are indivisible?”

Praising the EU-China investment agreement, the German leader said she was “so satisfied”.

She then called for President Biden to find common ground with the EU on taxing digital companies.

The two leaders spoke on the phone ahead of her speech on Monday.

The pair agreed that the COVID-19 pandemic and other global challenges could only be tackled through closer cooperation.

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Separately, Finance Minister Olaf Scholz welcomed the confirmation of Janet Yellen as Treasury secretary by the US Senate, voicing hope she could bring progress in reaching an international agreement on corporate taxation.

“Congratulations to the United States for making this outstanding choice! Janet Yellen is a very impressive person,” Mr Scholz said, adding that he was looking forward to working with Yellen, the former chair of the Federal Reserve.

Transatlantic relations cooled under former President Donald Trump, who attacked Germany repeatedly for its export strength and its relatively low NATO defence spending.

After bruising meetings of the G7 group of wealthy nations and NATO with Trump in 2017, Mrs Merkel said that Europe could no longer completely rely on its allies and that the continent must become more independent.

In their first phone call since President Biden took office, Mrs Merkel congratulated him on his inauguration.

“At the same time, she declared Germany’s willingness to take on responsibility in dealing with international tasks together with its European and transatlantic partners,” a German government spokesman said.

The two leaders agreed that more international efforts were needed to cope with the coronavirus pandemic.

“In this context, the Chancellor welcomed the return of the United States to the World Health Organisation,” the spokesman added.

The two leaders also spoke about foreign policy issues, particularly those relating to Afghanistan and Iran, and Mrs Merkel welcomed President Biden’s decision to return the United States to the Paris Climate Agreement.

In a readout of the call, the White House said the two leaders agreed on the “importance of global cooperation,” including on fighting climate change, containing the pandemic and pursuing a stable global economic recovery.

President Biden told the German Chancellor he intends to revitalise the transatlantic alliance, the White House said.

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