German Chancellor Angela Merkel, left, and Russian President Dmitry Medvedev, right, meet in St. Petersburg, Russia, 02 Oct 2008

Russian President Dmitri Medvedev says the global financial crisis shows the era of U.S. financial dominance is over and that it is time to implement worldwide financial reforms.

Mr. Medvedev spoke Thursday in St. Petersburg, alongside German Chancellor Angela Merkel.  The two leaders discussed trade ties, including plans for a 1,200-kilometer natural gas pipeline linking the two countries, as well as the financial meltdown.

For her part, the German leader also called for new mechanisms to control the system of global finance.

Chancellor Merkel also used the meeting to criticize Russia for its military incursion into Georgia in August.  She said the Russian sweep into two Russian-leaning Georgian breakaway territories was "not appropriate."

The proposed Nord Stream pipeline has stirred controversy in western Europe, in part because much of it would be built on the floor of the Baltic Sea.  Critics have attacked the project because the pipeline will bypass the Baltic nations and Poland.  Sweden opposes the project on environmental grounds.

Some EU member countries warn that the pipeline could disturb thousands of tons of toxic World War II chemicals and munitions sunken and buried in Baltic Sea sediment.  Nord Stream engineers insist the plan is environmentally sound.

Germany is widely seen as Russia's closest ally in western Europe.  However, ties frayed in August, when Russian troops swept into Georgia after the Tbilisi government tried to reclaim control of the pro-Russian breakaway territory of South Ossetia.

Despite the Russian incursion, Chancellor Merkel stood out among European leaders, pressing the European Union to keep communication links with Moscow open.

Some information for this report was provided by AFP and Reuters.