Speaking alongside France's new President Emmanuel Macron, who made his first official trip overseas to Berlin, Chancellor Angela Merkel said the two countries agreed to work closely on a "road map" of reforms to make the European Union and the Eurozone stronger in the coming years.
Macron, the country's youngest president, started filling out his administration Monday, announcing the appointment of Édouard Philippe as France's new prime minister.
The French president underlined that changes to European Union treaties had been a taboo for France in the past, but this would not be the case in the future.
A large group of onlookers, some carrying European flags, stood outside the chancellery as Mr Macron arrived.
Macron and Merkel were all smiles inside, and the German leader declared that "Europe will only do well if there is a strong France, and I am committed to that".
Germany and France have traditionally been the motor of European integration, but the relationship has become increasingly lopsided in recent years as France struggled economically.
For far-right leader Marine Le Pen, Macron's rival for the presidency, the selection of Philippe reflects a continuation of the system she hoped to break.
Macron is the conservative Merkel's fourth French president in almost 12 years as chancellor.
Macron said France and Germany had come "at a historic moment in their history" and both have a responsibility to fight against populism and restore faith in the European project.
Germany is looking to Macron to revitalize France as an economic power and political heavyweight in an European Union facing complex divorce proceedings with Britain.More news: Buffett's Berkshire boosts American, Southwest airline bets; sheds Fox
Macron made clear his determination to tackle his country's problems.
Macron also declared there needs to be "a Europe that protects our citizens better".
Macron faces his first big test next month in legislative elections that will determine how far he is able to advance his reform agenda. He's also a member of the mainstream-right party Les Républicains that was badly battered by Macron's victory in the presidential campaign.
Philippe is the mayor of the Normandy port of Le Havre, a trained lawyer and an author of political thrillers.
The choice of Philippe is aimed at drawing more defectors from The Republicans, in the same way as Macron's decision not to put up an REM candidate in Manuel Valls' constituency pulls the Socialist former prime minister closer, and makes it hard for a divided left to re-unite.
Philippe is a member of the centre-right Les Republicains party and is close to Alaine Juppe, the former Prime Minister, reports CNN.
Aside from his interest in boxing - he trains three times a week - Philippe has two more things in common with Macron: He passed through the elite ENA school, and his early political hero was Michel Rocard, a Socialist prime minister for whom he campaigned as a student before changing his political stripe.
Previous year he was part of Mr Juppe's unsuccessful campaign team in The Republicans' primaries, and then joined the presidential campaign of Mr Francois Fillon, the party's nominee. Macron founded the party En Marche! just ahead of the presidential elections, and so his nascent organization is at a colossal disadvantage in these crucial parliamentary elections, where all 577 seats are up for grabs.
Both leaders suggested they were prepared to change European treaties if needed, but Ms Merkel stressed that such measures were not immediately on the table. "I would be ready to do this, but first we will work on what we want to reform".
A German diplomat told Reuters Germany must decide whether it wants to continue its single-minded focus on budget rigour or work with Macron on joint ideas for Europe's future.