Merkel said that due credit should be paid to Kosor for her brave policyamidst the economic crisis and for putting Croatia on a firm footing.

It was important to hear that all moves made by the government led by PMKosor are being made for the sake of Croatia, Merkel said, pointing out effortsto reduce corruption and excessive bureaucracy and efforts in the privatisationprocess.

Merkel also praised Kosor for "great and brave" steps she had madein the process of solving a Croatian-Slovenian border dispute which had haltedCroatia's European Union accession process for some time.

Germany will encourage Slovenia to offer constructive support to such moves,Merkel said.

She declined to speculate about dates for Croatia's entry into the EU butexpressed optimism about it happening soon, and also commended Croatia forbeing on the right track.

The German leader highlighted Croatia's role as a key factor in overcomingproblems in the Western Balkans.

"I would like to especially thank Mrs. Kosor for efforts invested insearching a joint solution for Bosnia-Herzegovina and for her commitment todeveloping good relations among countries in the region," Merkel said.

The Croatian PM thanked Merkel for her invitation and for their"cordial, friendly and constructive talks", as well as for Germany'ssupport to Croatia on its EU road.

This is and must be the year in which we will do our part of the job, Kosorsaid in reference to Croatia's EU entry talks.

Kosor announced a Croatian-German business forum in Zagreb, to be held mostlikely in June.

She invited Merkel to pay a visit to Croatia soon.

Later on Wednesday, Kosor met representatives of the Croatian DemocraticUnion (HDZ) branches in Germany.

The talks between Kosor and German Economy Minister Reiner Bruederle werescheduled for Wednesday afternoon.

Before leaving Germany, Kosor was expected to hold a speech at the KonradAdenauer foundation about Croatia's experience in overcoming the globalfinancial and economic crisis.