"We've got to use every chance available to save energy," Merkel told the Bild am Sonntag newspaper published on Sunday, when asked about rising energy and food prices.

"We can do more to insulate buildings, to use renewable energy and when we make purchases we can buy appliances that use less power and cars that use less fuel. It's good for the climate and it's good for our wallet."

German leaders are invariably strong advocates of the car industry, one of the country's biggest employers and bulwark of the economy. Merkel, like her predecessors, opposes calls for a speed limit on motorways -- which the car industry rejects.

Imports from France, Italy and Japan are considered more fuel efficient than high-speed German cars.

Merkel also said Germans should get used to spending more of their income on food after decades spending less.

Germany's influential car lobby and lawmakers have sharply criticised the European Commission's CO2 proposals, which they see as discriminating against the German car industry.

In a country with an enduring love affair with high-powered cars and no overall motorway speed limit, brands such as BMW, Mercedes, Audi and Porsche are symbols of national pride.

Merkel's government is waging a rearguard campaign to delay implementation of EU rules on CO2 emissions, reduce penalties and ease the burden on Germany's luxury automobile industry.

Germany accepts the need for legal curbs on car emissions of 120 grammes per km on average from 2012, with fines for non-compliance rising gradually over three years, officials say.

But it wants all categories of cars to cut their emissions -- including smaller, less polluting vehicles produced by France and Italy that already meet the EU goal. It also wants the mandatory system to be phased in.