France's new president, Emmanuel Macron, has called for a "historic reconstruction" of Europe, saying it is "the only reaction" to fight populism.
She said the pair had a "joint conviction" that they needed to "deepen the European Union".
Both said they would work together more closely on defense, eurozone reform and reducing bureaucracy.
She also made her most positive comments yet about eurozone reforms mooted by Mr Macron, saying it may be possible to change EU treaties as would be required to enact them.
"From the German point of view, it's possible to change the treaty if it makes sense," she said. "I would be ready to do this, but first we will work on what we want to reform."
Read more: France's Macron calls for 'historic reconstruction' of Europe - BBC News