German Chancellor Angela Merkel on Monday welcomed French President Nicolas Sarkozy for a meeting expected to focus in part on calls for better monitoring of financial markets following the past month's market turbulence. The two leaders traveled to a German government guest house in Meseberg, north of Berlin, for their regular informal meeting. In driving rain, they posed outside for photographers under Merkel's umbrella, the Associated Press reported. German government spokesman Thomas Steg said international issues such as the Middle East, Afghanistan and Kosovo were likely to feature alongside economic questions. «They will not fail to address economic and financial subjects _ the question of hedge funds ... and of the necessary transparency of financial markets,» said Sarkozy's spokesman, David Martinon. In a letter to Merkel and other leaders last month, at the height of market volatility triggered by the crisis in the U.S. home loan market, Sarkozy urged the Group of Seven industrial countries to better monitor international financial markets. Sarkozy also called on the group to investigate the role of rating agencies in identifying risks that would lead to financial market crises. Germany currently chairs the G-7 and G-8. Merkel's Cabinet last month approved the broad outlines of legislation aimed at limiting risk in financial markets. The bill would focus on providing expanded information about investors in German markets _ including hedge funds.
