After talks with President U Thein Sein on September 3, Merkel told a joint news conference that Germany was ready to boost investment and development aid but would keep a close eye on human rights in Myanmar.

"Myanmar is a country with many ethnic groups and for economic growth, peace is of course required and peace requires compromise and tolerance with regard to minorities," she said.

Merkel hailed "democratic progress" in Myanmar, notably in press freedom, but said Berlin was watching preparations for parliamentary elections due in 2015.

"We expressed our hope that the elections will be free, fair and transparent," she said of her talks with U Thein Sein.

Merkel said Germany was focusing aid for Myanmar on an overhaul of its educational system and assistance to small- and medium-sized companies "in regions where there are ethnic conflicts".
 
U Thein Sein said he was the first president of Myanmar to visit Germany in three decades.

Speaking through an interpreter, he said his country had only been on a path to democracy for three years.

"In this time we had a lot of difficulties" but were able to pursue reforms "without bloodshed".

He said he would support opposition calls to amend Myanmar's constitution before the elections if they receive the backing of parliament and voters in a referendum.

However, constitutional amendments need the support of more than 75 percent of the parliament in which unelected military MPs have an effective veto over charter change because they hold 25 percent of the seats.

Opposition leader and Nobel laureate Daw Aung San Suu Kyi warned on a visit to Berlin in April that her country, despite the reforms, "is not yet a democracy".