Without Britain, Europe’s hopes of a new constitution were doomed, Angela Merkel, the Chancellor of Germany, said last night.

“I cannot imagine deciding such important questions without Britain and other EU member states,” she said, arguing that Europe could not take in any more members without thrashing new rules on how to run itself.

Mrs Merkel, the first woman Chancellor, and the first from the former East Germany, is embarking on the most high-profile year of her chancellorship, as Germany takes on the six-month presidency of the European Union and the year-long presidency of the G8 group of the world’s leading industrial powers.

Speaking last night to The Times in the glass-and-concrete Chancellery, she outlined an ambitious programme for the year, from repairing relations with the US to holding the ambitions of Russia and Iran at bay. Asked whether she had found anything in common with Gordon Brown, she said that he had visited her and “we got to know each other and you can’t say that we don’t have things in common — we’re both Europeans”. She added: “Anyway, I like the British.”

But Britain, deeply sceptical of more European regulation, is one of the obstacles to the passage of a new constitution to spell out how a Europe of 27 members should work. “A Europe of 27 countries works differently from one of 15,” she said, in the month that brought Romania and Bulgaria into the union. “The constitution treaty is about questions like whether we have a common foreign secretary or whether we want to decide on domestic policy and legal policy together.”

“Those countries who want further expansion”, including Britain, “must understand that it is in their interest to have decision-making processes which are workable,” she said. “The task of the German presidency, I believe, is to develop a ‘road map’ so that the whole issue can be taken to a reasonable solution before the European [parliamentary] elections” in 2009. France and Holland want an efficient EU too,” she said, referring to the “no” verdict both countries delivered in 2005 referendums on the ambitious draft rules for making decisions in an enlarged union. “We will find a way” of securing agreement.”

This spring Europe will celebrate the 50th anniversary of the Treaty of Rome, which “was also born of a crisis”, but was “of high quality”. A pragmatist, she wants “a pragmatic Europe” in which politicians can “see beyond the rims of their plates”. Mrs Merkel, criticised when running for election for stiffness, lack of spontaneity and lack of experience in foreign affairs, displays a new confidence in arguing for her view of Europe and its strained relations with the US. Talking animatedly, and gesturing forcefully, she acknowledged that a constitution acceptable to all countries would be “like the philosopher’s stone which we are still looking for”.

Europe started as a project to make peace, and then as a steel and coal community. “For us, energy is what coal and steel used to be,” she said, talking of the driving forces behind the European common market, arguing for the need for common policies. “We have, for example, to make sure that the Baltic pipeline does not work against Poland,” she said, referring to the scheme to deliver Russian gas directly to Germany, bypassing Poland.

Mrs Merkel, who returned from Washington last week, said that President Bush accepted the need for a revival of the Middle East “Quartet” — the EU, the United States, the United Nations and Russia — in tackling the Israeli-Palestinian deadlock. “We said that we should get the peace process going again,” she said. Mr Bush also agreed that trying again to involve the Quartet was “a good idea”. “First, however, people on the ground have to want peace themselves,” she said, noting that Condeleezza Rice, Secretary of State, was due in the region this month.

Asked whether she had put pressure on Ehud Olmert, Israel’s Prime Minister, in his recent visit to Berlin, she said “No”, adding: “If someone tries to put pressure on me, then that just strengthens my resolve. That’s not the way to do things.” She said that she was puzzled by recent reports of supposed Israeli plans for military action against Iranian nuclear installations.

One of her priorities in the 14 months of her chancellorship has been to repair relations with the US, which were badly strained under her predecessor, Gerhard Schröder. Her coalition Government still opposes the Iraq conflict, but Mrs Merkel has taken Germany into a more active role in Afghanistan.

To ease tension, she has been trying to cut bureaucracy in transatlantic trade. She insists that her wish for harmonisation does not undermine the struggles to revive the Doha Round of world trade talks. “This is nothing to do with Doha, which is necessary”, she said. “If we don’t have it we will fall into a world of bilateral arrangements and that will work against us because Europe is an exporting continent.”

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive