Croatian Prime Minister Andrej Plenkovic met on Tuesday with German Chancellor Angela Merkel in Berlin, on his official visit to Germany.
"We are close friends of your country," said Merkel after meeting with Plenkovic, and added that Germany was interested in increasing cooperation with Croatia.
She added that she knew Croatian government was working on implementing reforms, and said that these reforms are good for the development of the country and its people.
Merkel said that Germany is cooperating well with Croatia in terms of migration, even though Croatia is still not part of the passport-free Schengen area.
"You are doing a great job on the borders, and I wish to commend you for that," said Merkel.
Plenkovic said that Germany is Croatia's largest trade partner, and added that some 2.5 million German tourists have visited the country since 2017. He also mentioned the role of Croatians living in Germany, who are well integrated into German society.
Plenkovic and Merkel said that Croatia and Germany will soon sign an action plan on strengthening political, economic and cultural relations.
"The action plan is being prepared and we are hammering out the details," Merkel said after the talks with Plenkovic.
The document is likely to be signed at a ministerial level in the coming months, according to Plenkovic.
"We want to use good relations between our two countries to give them a new structure in the areas of politics, economy, and culture," Plenkovic said.
Merkel said she supported Croatia's aspirations to enter the European Union's passport-free travel Schengen Area.
"I believe that we are going in the good direction, and Germany very positively perceives Croatia's aspirations to join the Schengen area," she added.
"When it comes to possible changing of borders in the Balkans, Croatia is cautious, as this could have an impact on the neighbourhood," Plenkovic said.
Merkel, who has recently reiterated that there has been no need to change the borderlines in the Western Balkans, agreed with Plenkovic's statement.
Before his meeting with Merkel, Plenkovic held talks with officials of the German Chamber of Commerce and Industry.
On Tuesday afternoon, Plenkovic will continue his visit by touring the Axel Springer publishing house that publishes the newspaper Bild, and will also give a lecture on Croatia and the European Union at the Konrad Adenauer foundation.