Merkel calls for new era in the EU

She said that people needed to be convinced that Europe was working for them, creating jobs and taking account of their security in the face of a growing terrorism threat.

"We must put citizens first" said the chancellor adding that it must be clear to them "that Europe makes things better" she said pointing to Europe's success at being economically dynamic, socially responsible and at safeguarding jobs.

Nowadays people are more concerned about everyday issues such as unemployment and slow economic growth, contrary to previous expectations about the EU, she indicated.

But in order for EU to be effective, it needs its constitution, Mrs Merkel argued, referring to the rejection of the document last year by French and Dutch voters as a "setback".

"We absolutely need the constitution to ensure the European Union is effective and capable of action," Mrs Merkel said.

"We need to think about how we make the constitution a success. I want the constitution, the German government wants the constitution and I think a majority of this parliament wants it too."

Referring to her country's turn at the helm of the EU during the first half of next year, the chancellor said "If it's not tackled before, you can be sure that the German presidency will focus on this".

But she cautioned against moving too quickly on the project in case the EU is put back in a situation where it "cannot move forward".

Mrs Merkel's speech is the latest in a series of speeches about how the bloc can pick itself up after a bruising year which saw the EU constitution fail, division over enlargement and bitter member state fighting over the future EU budget.

European Commission president Jose Manuel Barroso on Wednesday said the EU had to win back its credibility before it could think about reviving the EU constitution.

"I am challenging national leaders. I am asking them: are you committed or not to this project of living together in Europe?", he asked.

The future of the EU theme is likely to stay in the headlines for much of the coming weeks with foreign ministers due to discuss it later this month and EU leaders taking a stab at the problem during a summit in June.