A top German official predicted today that the UK will have to adopt the euro 'faster than people think', despite the ongoing crisis in the single currency.
The extraordinary comments by finance minister Wolfgang Schäuble come on the day that Germany's Chancellor said the eurozone crisis would be resolved without a referendum in Britain.
Angela Merkel called for a 'limited treaty change' for further eurozone integration - exactly as spelled out in a leaked German memo which outlines an attempt to prevent a UK referendum that could lead to powers being clawed back from Brussels.
Germany's attempts to impose EU control on Britain will have increased the tensions between David Cameron and Mrs Merkel as they met in Berlin this morning.
The leaders are have clashed over German plans for a new tax on bank transactions and treaty change to shore up eurozone finances.
But at a press conference this afternoon, the pair ignored their differences and insisted that Britain and Germany will work together in a spirit of 'strong friendship'.
Harmonious: Angela Merkel and David Cameron tried to ignore their differences at a press conference today
Clash: The leaders acknowledged their disagreement over a financial transactions tax
Bond spreads as they stood overnight: The yield for troubled governments has become worryingly high
The leaders steered clear of most areas of disagreement and insisted they had had 'very good discussions between very good friends', but could not stop some evidence of discord slipping out.
When asked whether the European Central Bank should start printing money to guarantee eurozone debts, Mr Cameron said officials should 'do what is necessary' to defend the euro.
But Mrs Merkel warned that Europe's resources were not infinite as she insisted: 'One should not pretend to be more powerful than one really is.'
And when the pair were asked about the arguments over a European financial transactions tax, the German leader admitted they 'did not make any progress' on the issue.
In a blow to British hopes of a referendum on repatriating powers from Brussels, she also said that any move towards closer economic union in the eurozone would take place through 'a limited treaty change, only for the members of the eurozone'.
WHY NO REFERENDUM?
The Conservatives have long promised a referendum on repatriating powers from the EU, but have not yet delivered one.
Angela Merkel's comments today make a referendum less likely, as her 'limited treaty change' will not have to be approved by countries outside the euro, including the UK.
The Coalition's 'referendum lock' commits the Government to holding a public vote the next time Britain is supposed to sign up to a new treaty which would hand more power to Brussels.
But the British people will not have a say on the proposal that the eurozone crisis should be solved by further economic integration, as Mrs Merkel has declared that the UK will be excluded from the negotiations.
This would mean that Mr Cameron could avoid fulfilling his pledge to hold a referendum on EU powers the next time Britain is required to sign up to a new treaty, and will outrage Tory backbenchers hoping to claw back sovereignty from Europe.
Markets fell for a second consecutive day amid continued dithering over the future of the euro as the bond yields of troubled governments remain worryingly high.
But despite the danger that the debt crisis could endanger the very existence of the euro, Mr Schäuble insisted that all of Europe would eventually have to adopt the single currency.
He told a German news agency that his government 'respects' Britain's decision not to join the euro, but predicted that when the currency stabilised the whole continent would queue up to join, and added: 'It will perhaps happen faster than some in the British Isles currently believe.'
It was also revealed today that Berlin is hoping to create an intrusive body that could take over the economies of beleaguered eurozone countries.
A leaked memo by German foreign office officials shows that Berlin is bracing itself for other EU nations, which are too large to be bailed out, to default on their debts, effectively going bankrupt.
The six-page document says Germany wants to set up a European Monetary Fund to take over failing economies.
Entitled The Future of the EU, it calls for closer ‘political union’ while examining ways to limit treaty changes in an attempt to prevent countries such as Britain from holding a referendum.
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