German Chancellor Angela Merkel has called for a political union in the EU to solve the eurozone's debt problems.

Later, after talks with British Prime Minister David Cameron, Merkel specified her comments, made in a TV interview on Thursday, saying that economic policy and public spending should be more broadly aligned among eurozone states.

"We don't just need a monetary union. We also need a so-called fiscal union, that is to say, more budget policy making together," she said on ARD public television.

"We especially need a political union, that is, as time goes on, we must, step by step, give up powers to Europe and grant Europe capacities of supervision."

At a conference of 93 students at her office, held jointly with Cameron and Norwegian Prime Minister Jens Stoltenberg, Merkel said eurozone nations must co-ordinate government spending.

"It cannot be that the one (country) runs up a lot of debt and the other earns a surplus every year," she said. 

"Long-term it cannot be that the one (country) spends 3 per cent of GDP on research and the other spends nothing at all on research."