Merkel speaks out for two-speed Europe

She emphasised that a political union was also necessary: "That means that step-by-step in the future we have to give up more powers to Europe and grant Europe more oversight possibilities."

While there has been a concerted effort over the last two years to make sure that all 27 member states are on board when it comes to further integration steps, Merkel said ambitious states should not be held up by recalcitrants.

While it should be made possible that all member states take part "we should not stay still because one or other [member state] does not yet want to join in," said the Chancellor, making the clearest case yet for a two-speed Europe in matters of economic integration.

While these statements and similar comments she has made in the past are raising expectations about what the 28 June summit in Brussels can achieve, the German leader cautioned against thinking that it would lead to a big bang solution for the European Union.

But even despite Merkel's traditional down-playing of expectations ahead of an EU meeting - the summit is increasingly taking on a high-stakes feel.

It will take place after the Greek elections (set to determine the immediate future of the country in the eurozone) and the French parliamentary elections (freeing up President Francois Hollande from the domestic political arena).

Senior EU officials are working on plans to increase EU integration, including a banking union - seen as necessary to ensure the future survival of the single currency.

While Berlin has been leading the eurozone's aid response to troubled eurozone countries such as Greece, Ireland and Portugal, it is now also leading the debate on further political integration.

This push to give more powers to the EU level - part of Berlin's attempt to make sure countries keep their budgets in order in the future - is likely to expose deep fault-lines among member states.

France's response will be of particular interest.

Traditionally, the Franco-German engine has driven the EU forward. However, when it comes to the details, Paris has always been reluctant to give over-arching powers to the European Commission.