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Angela Merkel rejects UK and EU 'divorce' call ahead of talks Cameron and Merkel hold 'warm and friendly' EU budget talks
(about 1 hour later)
  
German Chancellor Angela Merkel has said she wants Britain to remain in the European Union, ahead of a crunch meeting with David Cameron. David Cameron and German Chancellor Angela Merkel have held "open, warm and friendly" talks about the controversial EU budget, Downing Street says.
At the end of the hour-long meeting Number 10 said "both parties were at the same end of the spectrum".
Mr Cameron had said the EU budget should be frozen or cut, but Mrs Merkel says an increase is necessary.
Officials said discussions on the issue would continue.
Ahead of the crunch talks between the two leaders, Mrs Merkel said she wanted Britain to remain in the European Union.
She was reacting to a call by UKIP leader Nigel Farage for an "amicable divorce" between Brussels and Britain.She was reacting to a call by UKIP leader Nigel Farage for an "amicable divorce" between Brussels and Britain.
The PM says the EU budget should be frozen "at worst" but faces calls from Tory rebels and Labour to demand a cut. Germany has indicated it is sympathetic to the UK's arguments that the EU needs to cut costs, but says some increase in the long-term budget is necessary.
Germany has indicated it is sympathetic to the UK's arguments but says some increase is necessary. Speaking at a joint press conference with Mrs Merkel before their talks, Mr Cameron said: "We are both believers that European countries have to live within their means, as does the European Union and I know that we will discuss that issue tonight."
Speaking at a joint press conference with Mrs Merkel in Number 10, Mr Cameron said: "We are both believers that European countries have to live within their means, as does the European Union and I know that we will discuss that issue tonight."
Of the EU budget, he said: "At best it should be a cut, at worst a freeze."Of the EU budget, he said: "At best it should be a cut, at worst a freeze."
Mr Cameron said: "I believe our membership of the European Union is important and that is the basis on which we will be having our discussions tonight" Mr Cameron said: "I believe our membership of the European Union is important and that is the basis on which we will be having our discussions tonight."
'Wonderful island''Wonderful island'
Mrs Merkel said the EU budget would "loom large" in the pair's talks as Britain and Germany had shared interests as net contributors to the EU - and both had to reach a deal with other countries that "will stand up in the court of public opinion back home".Mrs Merkel said the EU budget would "loom large" in the pair's talks as Britain and Germany had shared interests as net contributors to the EU - and both had to reach a deal with other countries that "will stand up in the court of public opinion back home".
She added: "We will not complete negotiations tonight but we want to do this in the spirit of partnership and friendship in order to focus our interests."She added: "We will not complete negotiations tonight but we want to do this in the spirit of partnership and friendship in order to focus our interests."
She refused "to be drawn into discussion" of whether Britain should decide if it wanted to leave the EU as the bloc moved towards closer integration, as recently suggested by Polish European commissioner Janusz Lewandowski.She refused "to be drawn into discussion" of whether Britain should decide if it wanted to leave the EU as the bloc moved towards closer integration, as recently suggested by Polish European commissioner Janusz Lewandowski.
But speaking earlier in the European Parliament, Mrs Merkel had a direct message for the British people - who she called "the inhabitants of this wonderful island" - telling them: "You won't be happy if you are alone in this world."But speaking earlier in the European Parliament, Mrs Merkel had a direct message for the British people - who she called "the inhabitants of this wonderful island" - telling them: "You won't be happy if you are alone in this world."
She was reacting to a speech by UKIP leader Nigel Farage, who urged her to tell Mr Cameron the time had come for "a simple amicable divorce" as feeling in the UK runs completely against the tide of the greater EU integration being promoted by the German leader.She was reacting to a speech by UKIP leader Nigel Farage, who urged her to tell Mr Cameron the time had come for "a simple amicable divorce" as feeling in the UK runs completely against the tide of the greater EU integration being promoted by the German leader.
Mrs Merkel hit back by saying: "I cannot imagine that the UK would not be part of Europe."Mrs Merkel hit back by saying: "I cannot imagine that the UK would not be part of Europe."
"I think it is also good for the UK to be in Europe," the German chancellor said, adding she would do "everything" to keep the UK in the EU "as a good partner"."I think it is also good for the UK to be in Europe," the German chancellor said, adding she would do "everything" to keep the UK in the EU "as a good partner".
Mrs Merkel's meeting with Mr Cameron comes less than three weeks before a summit of EU member states at which they will try to work out the next set of long-term spending plans for Brussels. In less than three weeks EU leaders will gather for a summit at which they will try to work out the next set of long-term spending plans for Brussels.
Speaking in Abu Dhabi, during his three-day visit to the Middle East, Mr Cameron said he would make a "very robust and strong argument" for an arrangement that forced the European Commission to limit its budget.Speaking in Abu Dhabi, during his three-day visit to the Middle East, Mr Cameron said he would make a "very robust and strong argument" for an arrangement that forced the European Commission to limit its budget.
He said: "They are proposing a completely ludicrous 100 billion euro increase in the European budget.He said: "They are proposing a completely ludicrous 100 billion euro increase in the European budget.
'Better deal'
"I'll be arguing for a very tough outcome. I never had very high hopes for a November agreement because you have got 27 different people round the table with 27 different opinions.""I'll be arguing for a very tough outcome. I never had very high hopes for a November agreement because you have got 27 different people round the table with 27 different opinions."
Last week the government was defeated in a Commons vote on the EU budget after 53 Conservative MPs defied their party over the issue.Last week the government was defeated in a Commons vote on the EU budget after 53 Conservative MPs defied their party over the issue.
Tory rebels joined with Labour to pass an amendment calling for a real-terms cut in spending between 2014 and 2020.Tory rebels joined with Labour to pass an amendment calling for a real-terms cut in spending between 2014 and 2020.
'Better deal'
The amendment was not binding on ministers, but was seen as a blow to David Cameron's authority on Europe ahead of the EU budget summit.The amendment was not binding on ministers, but was seen as a blow to David Cameron's authority on Europe ahead of the EU budget summit.
But one of the rebels, Tory MP Douglas Carswell, told BBC News the Commons vote would strengthen the PM's hand, saying: "We might just be able to get a better deal."But one of the rebels, Tory MP Douglas Carswell, told BBC News the Commons vote would strengthen the PM's hand, saying: "We might just be able to get a better deal."
The BBC's correspondent in Berlin, Stephen Evans, says many in Angela Merkel's parliamentary party show signs of exasperation at what they see as the British hard-line.
Any deal agreed by EU leaders later this month would have to be put to the Commons for approval.Any deal agreed by EU leaders later this month would have to be put to the Commons for approval.
Mr Cameron has said he would be prepared to veto any unacceptable proposal - which would mean that a deal would not go ahead.Mr Cameron has said he would be prepared to veto any unacceptable proposal - which would mean that a deal would not go ahead.
If no agreement is reached by the end of next year the 2013 budget will be rolled into 2014 with a 2% rise to account for inflation.If no agreement is reached by the end of next year the 2013 budget will be rolled into 2014 with a 2% rise to account for inflation.