Arsène Wenger insists Arsenal are in a position to compete for the very best talent in the transfer market - but he also wants to keep developing young players.

Having lost successive games to Blackburn Rovers and Bayern Munich, the Frenchman's squad has been under scrutiny.

Wenger says he is in a good position to strengthen this summer, but will not lose sight of the Club’s core values and principles.

We are in a stronger situation where we can spend some money

“I think, now, we are in a stronger situation where we can spend some money,” he said. “We went out to spend money at Christmas but we didn't find the players.

“I'm not reluctant to spend. First of all, we only had money recently. Secondly, in England there is a way of thinking that every problem is sorted out just by spending money - but that's not always the case. If it was, the same teams would win the Champions League every year.

“I believe that the problem today is not the money, it about finding the talent that strengthens your team.

"I also believe we have to be faithful to what this club is about, which is to give a chance to the young players we educate - that is vital. Therefore [we should only] bring in the players who really give us a plus.

"If we find tomorrow a player of top, top, top quality, we will take him."

I believe in some areas of our team we can compete with anybody in the world

Despite their defeat to Bayern Munich on Tuesday night, Wenger insists Arsenal can still compete with Europe’s elite.

“We are not far away, but it is difficult to convince you today,” he said. “We are not so far at the moment from Bayern.

“We need to be intelligent and strong in this period. We have to keep a guideline of what we have done until now. Strengthen the team in the positions we feel we are a bit weaker. But we have a basis of a team that is very strong for me. I believe in some areas of our team we can compete with anybody in the world. We analyse all the European and English teams and in some areas of our team we are very competitive.

“We speak about the Wilsheres, the Cazorlas and we have a very strong technical basis, but we have to be more efficient.”

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Copyright 2014 The Arsenal Football Club plc. Permission to use quotations from this article is granted subject to appropriate credit being given to www.arsenal.com as the source Rob Kelly 22 Feb 2013