Merkel backs deeper Russian ties, Magna bid

SOCHI, Russia (Reuters) - German Chancellor Angela Merkel on Friday backed a host of Russian investments in the car and shipbuilding sectors to help struggling European companies weather the economic crisis.

Speaking after talks with President Dmitry Medvedev, Merkel said Germany had a "strong preference" for Magna's Russian-0cked bid to buy control of General Motors' European unit Opel.

Merkel condemned a string of recent murders in Russia's North Caucasus, but the talks focused on joint investments, including in Germany's fifth largest shipbuilder, Wadan, and chipmaker Infineon.

"All (these) projects, which have emerged from somewhat difficult economic situations amid the crisis, are opening up opportunities for a more intensive, win-win based cooperation in the future," Merkel said at a joint news conference in the Black Sea resort of Sochi.

Germany, Europe's largest economy, is Russia's biggest trading partner but bilateral trade has plummeted in the first five months of the year from a record annual turnover of $67.2 billion in 2008.

Russia's economy, which boomed for a decade, has now been pushed into a deep recession. Russian companies are eager to find a foothold in European Union markets, where the Kremlin says it has faced investment restrictions.

OPEL BID FAVOURED

The Opel bid by Magna and its Russian state-controlled partner Sberbank is favored by many in Berlin's establishment who are worried about 25,000 Opel jobs in Germany ahead of an election next month.

When asked by a reporter why Russian money should be invested in Germany rather than at home, Medvedev said the planned German investments would bring technology and thus help reform Russia's energy reliant economy.

"During the crisis... it is possible to make favorable investments -- to buy assets at cheap prices," he said. "Both Russia and Germany are interested in joint investments, but these must be quality investments."

Merkel, who has regularly raised human rights concerns with the Kremlin, condemned the killing of children's charity head Zarema Sadulayeva and her husband in Chechnya earlier this week.

"I know that human rights are an issue very close to the Russian president's heart," she said.

"But it's obviously also the case that it's important to do everything to bring to account those who commit these horrific murders, who time and again kill representatives of non-governmental organizations."

Medvedev said the murders were aimed at undermining stability in the region and bluntly demanded strongman Chechen leader Ramzan Kadyrov solve the cases and punish those behind the murders.

"The president of the Chechen republic should do everything he can to find and expose those responsible."

(Additional reporting by Oleg Shchedrov and Conor Humphries in Moscow, and Andreas Moeser in Sochi, editing by Ralph Boulton)