Investment Parity

The chancellor said she agreed in principle in Russia investing in Europe but added that Russian investment should be matched by equal opportunities for European companies to invest in Russia.

"We count on Russia being a reliable partner," she said in an interview with the daily Süddeutsche Zeitung on Monday. "I therefore agree in principle to Russia getting economically involved in Europe. But good economic relations between Russia and the EU can only be based on reciprocity.

"Equally, we have an interest in acquiring the ownership rights to Russian gas fields," the chancellor said.

EADS not ready for more investors

Franco-German aerospace venture EADS, however, is one company Merkel said should not be open to Russian investment.

"At the moment, we shouldn't admit another stakeholder into the shareholder pact," she said. "But I support closer cooperation in aircraft construction, as EADS has already begun to do."

The European Aeronautic Defense and Space Company is controlled jointly by France and Germany, with the delicate balance of power resting on a complex construction of multiple shareholdings, both public and private.

Last summer, however, the Russian state bought a stake of between 5 percent and 7 percent via state-controlled bank Vneshtorgbank (VTB) and Russia is believed to be eager to gain a greater say in EADS.

Nevertheless, Moscow has been keen to calm European concerns on the matter, with President Vladimir Putin insisting recently that Russia wanted "cooperation" with EADS, and had no plans for a "hostile takeover."

United response to Russia

Shares in EADS dropped by 8.6 percent last week after the announcement that its subsidiary aircraft manufacturer Airbus would cut 10,000 jobs over four years, streamline its production facilities and reorganize the distribution of work between factories across Europe.

Merkel also said it was important for the EU to act in a unified manner when dealing with Russia, no easy task as eastern European countries often have a different opinion on Moscow's policies than western European nations.

Poland, for example, delayed talks on an EU-Russia energy partnership pact last year because Warsaw opposed a trade embargo Russia placed on Polish meat products.

Rockets raise additional questions

Tensions in Russia were also heightened last month after the US announced plans for a missile defense shield, portions of which would be located in Poland and the Czech Republic. The two EU member states have expressed their acceptance of the US plans while Putin said the shield posed a threat to Moscow and could potentially start a new arms race.

Germany's Merkel backed the American proposal, saying the missile shield was a "purely defensive system" that would not be aimed at Russia and an issue that needed to be discussed in talks between Russia and NATO.

"I think it is appropriate to think about how to arm oneself against possible rockets coming from regions we did not really have to have our eye on during the Cold War," Merkel said. "But we can and have to communicate more closely."