BRASILIA, Aug 20 (Reuters) - German Chancellor Angela Merkel pressed Brazil's government on Thursday to open its markets more to foreign companies, and said she saw an opportunity to reach a free-trade deal between the European Union and South America's Mercosur trade bloc.
Merkel is on a two-day visit to Brazil with a large delegation of government officials and representatives from German companies, which have poured more than 19 billion euros ($21.22 billion) into the struggling economy.
"We could broaden our trade. We need reliable investment condition, she said in Brasilia as she pressed for better access to Brazilian markets for German pharmaceutical products and medical technology, for example.
German government officials want to use the trip to lobby for German companies to be involved in a $57 billion investment programme in railways, harbours and airports announced by Brazilian President Dilma Rousseff.
Those companies interested in the programme include Siemens , Fraport and Deutsche Bahn. They face competition from Chinese businesses.
Brazil is hobbled by legislative gridlock, a lack of viable alternatives to the established political parties and an economic reversal that has pushed its currency to a 12-year low.
The economy is reeling from its sharpest slowdown in three decades. A vast corruption scandal has ensnared political and corporate bosses, and a federal audit is considering rejecting the government's 2014 book-keeping.
However, Merkel stressed Germany's "very special relationship" with Brazil, where more than 1,300 German companies are active. She also saw a new opportunity to clinch a trade agreement with the Mercosur trade bloc.
Off-and-on talks on an agreement have been held since 1999. Negotiations have floundered in the past over European Union agricultural subsidies and the opening of Mercosur industries to competition from Europe.
"I gained the impression that the president is very interested," Merkel said of the trade negotiation after meeting Rousseff.
Paraguay and Uruguay are already interested in a swift deal with the EU, though Venezuela is reluctant.
$1 = 0.8956 euros Reporting by Andreas Rinke; Writing by Paul Carrel; Editing by Larry King