Merkel says wants good economic ties with Ukraine and Russia

"This free trade agreement is not directed against Russia," Ms. Merkel told a German-Ukrainian economic conference in Berlin on Friday.

German Chancellor Angela Merkel said a European Union free trade agreement with Ukraine is not directed against Russia and that Berlin wants good economic ties with both Ukraine and Russia.

The European Union free-trade pact will come into force at the start of next year despite efforts by Russia to delay the deal.

"This free trade agreement is not directed against Russia," Ms. Merkel told a German-Ukrainian economic conference in Berlin on Friday. "In contrast, we want Ukraine to have good economic relations with the European Union, with Germany but at the same time also with Russia."

Ms. Merkel said Ukraine's low wage costs and highly qualified workers showed it could be a good place to do business and pressed Ukraine to continue with its economic reforms to tackle corruption to encourage more German firms to invest there.

Ukraine's Prime Minister Arseny Yatseniuk said his country has started to see some positive dynamism in its economy in recent months but added that it needed Germany's help to implement its reforms.

Ms. Merkel said Germany was ready to help Ukraine on its path towards economic stability and prosperity. Together with Mr. Yatseniuk, she signed a treaty on the German-Ukrainian Chamber of Commerce.

Germany is Ukraine's third most important trading partner after Russia and China. The two countries had bilateral trade worth 5.2 billion euros ($5.8 billion) in 2014.