German Chancellor Angela Merkel and French President Francois Hollande called for closer political and economic ties between the two countries and stressed European unity in finding the way out of the debt crisis on Saturday as they met to mark the 50th anniversary of a key step in their post-war reconciliation.

"We are at the heart of Europe," Hollande said in the southwestern German town of Ludwigsburg, where former French President Charles De Gaulle delivered a speech in 1962 to German youth, a key gesture of post-war reconciliation between the wartime foes.

During their meeting, which was the latest in a series of events marking 50 years of partnership between the two countries, the two leaders discussed a possible merger between Airbus-maker EADS and the British defence group BAE, as well as tighter checks on the European banking sector.

EADS and BAE announced last week that they are negotiating a merger, which would create the world's largest defense and commercial aviation company. BAE plans to obtain 40 percent in the united company, while EADS will get hold of 60 percent. The negotiations about the merger are scheduled to end on October 10.

Both governments in France and Germany, which hold major stakes in EADS, have been waiting for the merger project to be clarified before making judgments and taking decisions.

"Decisions have not been made," said Merkel, adding that the two countries remain in a very close contact on the issue.

The German chancellor also discussed common banking supervision of the European Central Bank with her French counterpart, saying that the two countries' views were "not apart."

However, their differences on the banking union are obvious. Hollande said the framework of a banking union should be in place "the earlier the better," while Merkel urged a more cautious approach, stressing that quality should be ensured.

EU leaders decided in June to allow the European Stability Mechanism (ESM), EU's permanent bailout fund, to recapitalize banks directly instead of passing the loans through governments, on condition of a common banking supervisor in place by the beginning of 2013.

Germany and France agree on the role of the European Central Bank (ECB) as the common banking supervisor, but differ on the scope and speed of the supervision. Paris wants the ECB to supervise all 6,000 eurozone banks, while Berlin favors the supervision of only big banks that have an impact across the eurozone.