Nauwere samenwerking tussen Spanje en Duitsland (en)

During a visit to Spain, German Chancellor Gerhard Schröder and his Spanish counterpart José Luis Rodríguez Zapatero have agreed a raft of measures to boost relations between the two countries.

The leaders agreed to closer cooperation in the military, business and foreign policy spheres as well as reaching broad consensus on reform of the EU's economic rules.

Mr Schröder was hosted by Mr Zapatero in his home town of Leon, northern Spain, in a symbolic gesture aimed at displaying the closeness of ties.

"I think that relations between Spain and Germany have never known a better moment than now", Mr Schröder remarked after the meeting, according to press reports.

Spain moving closer to Berlin and Paris

Since taking office earlier this year, the Spanish premier has sought to move closer to Paris and Berlin, reversing the atlanticist tendencies of the previous Spanish administration.

During his visit Mr Schröder secured Spanish support for a joint Franco-German bid to reform the rules that underpin the euro to make them more flexible.

Germany, as well as France, has repeatedly broken the rules of the so-called stability and growth pact that sets budget deficit limits for euro members.

Mr Zapatero's backing will be a boon for Berlin and Paris who face major opposition among other EU member states.

The two men said they held common positions on Iraq, Iran and the Middle East Peace Process. Mr Schröder, however, made no concessions on Spanish proposals to thaw the EU's ties with Cuba.

A position was also reached on dealing with the re-elected Bush administration.

Talks were also held on the EU's 2007-2014 budget which is likely to see Madrid lose some aid to the countries which joined the EU in May this year.

Spain also agreed to boost defence manufacturing cooperation.