Dresden, Germany - Germany's ailing education system, which has come under fire because of the high number of dropouts, is to win a cash infusion, Chancellor Angela Merkel said Wednesday after meeting state premiers.

Merkel has picked education as a strategic focus for Germany after a series of damning reports from the Organization for Economic Cooperation and Development 
(OECD).

The education summit in Dresden agreed to aim at lifting the proportion of each age cohort which attends university from 35 per cent now to 40 per cent.

The proportion of German economic output to be spent on education and scientific research must grow, they agreed.

Merkel said, "I'm delighted to announce the federal government and the states have agreed to devote 10 per cent by 2015 to education." But a dispute remained over who was to pay: the 16 states or Berlin.

Long-term unemployment was worst in sections of the population which had not completed schooling, Merkel said.

Annual OECD reports have criticized German schools for failing the children of the poor and ethnic minorities, even though higher-status children are well educated.

German universities have been criticized for making entry too difficult.

Raising education spending to 7 per cent of GDP and research spending to 3 per cent would mean annual increases of between 25 billion and 60 billion euros (at least 32 billion dollars), experts said.

The federal government has only limited authority over education, with the states reluctant to give up their powers. (dpa)