By James Mackenzie
VATICAN CITY (Reuters) - German Chancellor Angela Merkel met Pope Francis on Saturday and, apparently responding to his criticism of a heartless "dictatorship of the economy", called for stronger regulation of financial markets.
On Thursday, Francis appealed in a speech for world financial reform, saying the global economic crisis had made life worse for millions in rich and poor countries.
Merkel visited Rome for a few hours specifically to meet the pontiff and spoke with him privately in his library for 45 minutes, unusually long for a private papal audience.
She told reporters afterwards that the scandals and excesses criticized by Francis earlier in the week showed that vital checks and balances had not been functioning properly.
"Crises have blown up because the rules of the social market have not been observed," she said, adding that tightening financial market regulation would be a main objective of the meeting of leaders of Group of 20 economic powers in September.
"We have made progress but we are nowhere near a point where we could say that the kind of derailment that leads to market crises could not happen again and so the issue will again play a central role at the G20 meeting this year," she said.
"It is true that economies are there to serve people and that has by no means always been the case in recent years."
Merkel, the daughter of a Lutheran minister, said she and Francis had spoken mainly about globalization, the European Union and the role of Europe in the world.
"Pope Francis made it clear that we need a strong, fair Europe and I found the message very encouraging," said Merkel, head of the Christian Democratic Union, which has a strong Catholic component.
In his first major speech about finance since his election in March, Francis had also urged states to take greater control of their economies and protect the weakest.
Merkel, who grew up in communist East Germany before the country was re-unified, said both she and Francis had "lived under dictatorships", referring to the military junta that ruled the pope's native Argentina from 1976 to 1983.
Merkel gave Francis, who lived briefly in Germany when he was a Jesuit priest, three volumes of poetry by Friedrich Hölderlin and 107 CDs of music by German conductor and composer Wilhelm Furtwaengler.
"I don't know if you will have the time to listen to all of them," she joked as she gave him the music.
(Additional reporting By Philip Pullella)
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