China and Germany in trade talks

28 June 2011 Last updated at 10:10 GMT German Chancellor Angela Merkel hosted a formal dinner for Mr Wen in Berlin Chinese and German leaders are meeting for trade talks in the German capital Berlin, with the Chinese seeking new investment by hi-tech companies.

Chinese Premier Wen Jiabao arrived on Monday evening on the final leg of his European tour, and is meeting German Chancellor Angela Merkel.

Germany is by far China's biggest trading partner in the EU.

Mrs Merkel predicted bilateral trade would rise to 200bn euros (?178bn; $284bn) from 130bn over five years.

While China eyes more sophisticated markets, German firms do not want to lose know-how to Chinese competition.

Both sides are now starting to understand how they can benefit from each other, the BBC's Stephen Evans reports from Berlin.

Some German companies are keen to manufacture in China and realise that this will involve some transfer of technology, while remaining cautious about what trade secrets to hold back.

China has been increasing its holdings of bonds denominated in euros. Were these loans to eurozone governments to change, the crisis in the eurozone would get worse, our correspondent says.

'Respect our choices'

Mr Wen's visit began with an informal dinner hosted by Mrs Merkel at a lakeside villa on Monday.

The German leader insisted she would not play down human rights concerns for the sake of trade.

"We have different opinions on certain issues but I am confident we can discuss them," she said at the dinner.

Speaking to German and Chinese business leaders at his hotel on Tuesday, Mr Wen said he would not accept lectures from European partners.

"China respects the political system and the development model chosen by the citizens of the EU," he said.

"In exchange, we expect from the EU respect of our sovereignty, our territorial integrity and the autonomous choices of the Chinese people."

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Tough EU talks ahead for Iceland

28 June 2011 Last updated at 08:53 GMT Iceland already fulfils some EU criteria but years of talks may lie ahead Iceland has formally opened what is expected to be a long negotiating process with the EU over accession, as a dispute over fishing rights persists.

Speaking in Brussels, Iceland's Foreign Minister Ossur Skarphedinsson said his people were still not committed to joining because of the issue.

He did not expect Iceland to join the EU for at least two years, he added.

A strong fisheries lobby is opposed to surrendering exclusive access to fishing grounds to other states.

When Iceland recently increased its mackerel catch to exploit a glut in its waters, the EU threatened to block Icelandic boats from using its ports.

Another outstanding issue is the country's settlement of a row with the UK and the Netherlands over debts linked to the collapse of its banking industry in 2008.

However, the tiny nation of 323,000 is otherwise well-positioned to join the other 27 members of the EU.

It has a stable, centuries-old democratic tradition and is already part of the European Economic Area and the Schengen visa-free travel zone.

'Highly integrated'

Hungarian Foreign Minister Janos Martonyi, who headed the EU side at Monday's talks, said a "historic moment" had been reached in relations with Iceland.

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My logic tells me we will come to a deal... but based on my experience, those negotiations will be difficult, drawn out and might postpone the final outcome... ”

End Quote Ossur Skarphedinsson Icelandic Foreign Minister "Iceland is a country which is already highly integrated into the European system," he said.

To join the EU, Iceland must successfully conclude negotiations on 35 policy areas ("chapters"), bringing its laws into compliance with EU norms.

With Brussels effectively waiving negotiations on two chapters - science/research and education/culture - its Commissioner for Enlargement, Stefan Fuele, said he looked forward to talks on agriculture and the fisheries at the earliest opportunity.

Mr Skarphedinsson said he expected talks on fisheries to begin in the second half of this year.

He told Reuters news agency: "It all hinges on fisheries.

"If they [EU officials] listen to our arguments carefully and accept our arguments... it will be swift.

"My logic tells me we will come to a deal... but based on my experience, those negotiations will be difficult, drawn out and might postpone the final outcome...

"I assume fisheries will be the last chapter to be finished."

If the talks are successful, Iceland's bid still faces a referendum.

Earlier this month, another candidate, Croatia, was given the go-ahead to join the EU and that is likely to happen in 2013.

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