As the eurozone turmoil mounts, German Chancellor Angela Merkel is trying to regain the upper hand with calls for long-term political integration, but she continues to resist emergency action.

“We need more Europe ... a budget union ... and we need a political union first and foremost,” Mrs Merkel told German public TV yesterday. “We must, step by step, cede responsibilities to Europe.”

Her proposals fall far short of the bold measures to douse the raging fires, demanded by US President Barack Obama and British Prime Minister David Cameron.

Speaking later yesterday with students in Berlin, with Mr Cameron and Norway’s Prime Minister Jens Stoltenberg, Mrs Merkel reiterated that there was no such thing as a magic solution to the crisis.

“Calling for this one big bold stroke to make the euro crisis go away won’t work,” she insisted.

“These problems have piled up over many years and now it will take some while to render this system fit for the future.”

A European diplomat in Berlin said that Mrs Merkel’s latest comments on a political union were aimed at hitting back at the impression that she had been sitting on her hands as the debt crisis has deepened and widened.