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Schroeder, Bush 'put Iraq in past'

Schroeder: "We both agreed that we have to talk about the present and the future now."

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George W. Bush

WASHINGTON -- German Chancellor Gerhard Schroeder and U.S. President George W. Bush say their differences over the war in Iraq are in the past.

The two leaders sat side-by-side in the Oval Office of the White House on Friday, smiling and appearing relaxed as they took questions from reporters.

Bush proclaimed that "relations are good" between the two countries despite bitterness over Iraq.

"We have differences -- in the past," Bush said. "But there's nothing wrong with friends having differences. We're both committed to putting the differences behind us and moving forward."

Schroeder, who was fiercely opposed to the war, declared his first White House visit in two years a success.

"We talked not about the past," Schroeder said. "We both agreed that we have to talk about the present and the future now."

Neither leader mentioned a brewing dispute over the U.S. dollar's weakness against the euro.

In a speech before the Council on Foreign Relations in Chicago on Thursday, Schroeder warned that world trade could be harmed by further shifts in the exchange rate.

"Major imbalances in the global economy and fluctuations in exchange rates give us cause for serious concerns," he said.

Outside the White House Friday, Schroeder told reporters that he had raised the issue of the dollar with Bush.

"The president made clear that he is politically interested in a strong dollar, not a weak one," Schroeder said. "It is clear that governments have limited possibilities for action. As you know, the central banks, which can act, are independent and we respect that."

Before making the trip, Schroeder told the Financial Times newspaper that he intended to express his dissatisfaction with current exchange rates and remind Bush that the United States and Europe have a "common responsibility" for the world's economy.

The euro has risen by more than 50 percent against the dollar, from a record low of 82 cents nearly four years ago. The euro reached an all-time high of more than $1.29 last week. (Full story)

Before leaving for Washington, Schroeder told CNN that tension between the two countries no longer existed.

"There is nothing to patch up, because we have a good working atmosphere like people who know that they have to represent their countries and know there are sometimes different points of view, must have," Schroeder said.

Last year a bitter divide opened between the two nations, halting communication between Bush and Schroeder for months at a time.

Then two months ago the thorny issue was raised of who would win lucrative primary contracts for the reconstruction of Iraq. Germany is not on that list because of its opposition to the war.

Schroeder said he expects to discuss ways Germany can help in Iraq, but his refusal to send troops there still stands.

Analysts say the relationship between Germany and the United States is changing fundamentally.

Jeffrey Gedmin, of the Aspen Institute, said: "With the end of the Cold War and September 11, both sides for different reasons and similar reasons have been renegotiating the relationship.

"It is not all or nothing, it's not 'we don't need you any more and you don't need us any more,' it is 'we need you sometimes in different ways for different things.'

"For many Germans who grew up after World War II, the United States was Germany's best friend. Now, because of the conflict in the Gulf, a psychological disengagement is seemingly taking place."

CNN's Stephanie Halasz said: "The U.S. perception of Germany appears to be improving, perhaps because the war is now over."

A Gallup poll this month says only 26 percent of Americans view Germany unfavorably, down from 44 percent last year.

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