Angela Merkel has backed the creation of an economics and finance ministerial role for the Eurozone, and a euro-budget to help countries undergoing economic reforms.
Merkel, who is campaigning for re-election as German Chancellor in elections this month, is echoing calls made by French President Emmanuel Macron for more Eurozone integration.
Eurosceptics said Merkel's comments were evidence of the EU's drive for more co-operation between the Member States, and that the UK was right to leave the bloc and maintain its independence.
John Redwood, Conservative MP for Wokingham, said the EU was a "state in the making", and that it would have been "miserable" for the UK to remain a member and keep the EU27 from integrating.
"If they choose to govern together and the Germans want to pay more taxes to send to the south, that's up to them," Redwood said. "But UK taxpayers did not want to be involved."
Conservative MEP and leading Brexit campaigner Daniel Hannan said: "This is the kind of proposal that would have alarmed me two years ago...I can simply wish our allies the best of luck.
"We can look forward to better relations than we had previously."
Merkel told reporters at a press conference that a finance minister for the Eurozone would help co-ordinate economic policy across countries in the single currency. Her finance minister Wolfgang Schaeuble has previously made it clear that he would not support such a move, but he has not said if he will remain in his job after the elections.