She also stressed the importance of financial reforms that make investors, rather than taxpayers, pay for future crises, adding that Germany was determined to "anchor a new stability culture in Europe."

In her speech, Merkel urged her party to support plans of slashing the armed force by at least a quarter and suspending conscription. "After the end of the Cold War, the security situation has changed fundamentally," she said. "We are surrounded by friends but at the same time new threats emerge."

She said general conscription, a major policy that the CDU and CSU once insist on, was found "no necessity" in current situations.

Merkel received a nine-minute standing ovation after her speech.

The two-day conference is to end on Tuesday.

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