The talks between Chancellor Angela Merkel and Panamanian President, Juan Carlos Varela Rodriguez, focused on bilateral and economic relations as well as regional and international political issues. Panama is "a partner with a dynamically developing economy", which is becoming the centre of Central America, said the Chancellor. The strong presence of German companies and good flight connections further strengthen economic and business relations.

Strengthening economic and business links

The Chancellor welcomed the fact that Panama was one of the first countries to sign the Paris Agreement on climate change. "We are delighted that energy efficiency, renewable energy and rainforest protection are high on Panama’s agenda."

The Chancellor also called for greater involvement of German businesses in Panama. "We would like to see German companies too being able to bid for orders and major infrastructure projects that are planned in Panama," she stressed.

President Varela announced that a delegation from Panama would be visiting Germany to find out more about the country’s system of dual technical and vocational education and training. "We will be advising Panamanian companies to seek inspiration in Germany," he declared.

Agreement on information sharing

With a view to the publishing of the "Panama Papers" the Chancellor praised Panama’s efforts to achieve greater transparency in the field of fiscal policy. "Panama has responded very swiftly and we are delighted that Panama has now declared its readiness to adopt OECD standards."

Angela Merkel stressed that it is hoped that bilateral negotiations between Germany and Panama regarding an information sharing agreement, which began this July, can be finalised by the end of this year or the beginning of next year.

Looking at the cooperation between Panama and the Global Forum on Transparency and Exchange of Information for Tax Purposes, she said, "I can only encourage Panama to clearly and unambiguously regulate past matters, because this is extremely important in order to cultivate trust."

"We want to fight together to achieve greater transparency in the financial system," said President Varela. Panama intends to play a leading part in combating tax evasion and in closing gaps in the financial system so that tax revenues can be used for genuinely social purposes.

After the Panama Papers became public, the G20 finance ministers agreed at their spring meeting in Washington on suitable measures to combat tax havens. An automatic system of information exchange is to pass on information on bank balances of tax evaders directly to the responsible tax authorities in their home country. German banks have been gathering this data since the start of this year. So far more than 90 countries have signed the agreement, which is to come into effect in 2017.

Stepping up international cooperation

Within the framework of their discussion of the political situation in Latin America, Chancellor Angela Merkel and President Varela touched on the situation in Colombia in the wake of the failed peace agreement with FARC and on the difficult situation in Haiti following Hurricane Matthew. They also discussed concerns in Venezuela and the situation in Cuba, underlined Angela Merkel. "I am delighted that Panama sees itself as a central country and is endeavouring to help the region to deal with its problems and move forward," she said.

President Varela declared, "We want to further extend diplomatic relations and use the bridge that we are building through our relations to Chancellor Angela Merkel to further extend relations between the European Union, Central America and the Caribbean." Panama admires the leading role played by the Chancellor in the European Union and in the world, with its emphasis on humanitarian considerations, and quite especially Panama admires the way Germany is working for prosperity and peace in the world. "We see this as a model that we would like to emulate as a leading nation in our region," he said.

This includes joint efforts to combat terrorism, protect borders and ensure an exchange of information in the fight against illegal migration. "We intend to be a responsible country in which tax evasion, terrorism, drug trafficking and insecurity are combated," stressed President Varela.

Germany has enjoyed diplomatic relations with Panama since 1951. Panama is Germany’s main export market in Central America and a priority country for German investment. Panama’s imports from Germany are finished products, vehicles, primary chemical products (mainly pharmaceuticals), machinery, cars and car parts, and electrical goods. Germany’s main imports from Panama are tropical fruits and, in smaller quantities, palm oil, shellfish, coffee and copper.