At a press conference where she praised Ireland as a "superb example" of how to emerge from a debt emergency with the help of the EU, Merkel said the eurozone was still seeking the right medicine to heal the common currency.
"I believe we have still not given a sufficient answer to the question of the eurozone's future," Merkel told reporters, when asked about ongoing turmoil on the markets undermining the most vulnerable of the 17 nations using the euro.
She reiterated that she believed treaty changes, which would beef up the EU's power to punish countries that flagrantly violate the rules on budgetary discipline, were the only way to restore confidence. This would include sanctions that could be mandated by the European Court of Justice.
Kenny indicated he would prefer to see the current mechanisms at the EU's disposal exhausted before contemplating treaty changes in light of Ireland's past trouble in getting reforms approved in a referendum.
"I don't want to get into a position where you have a major competency change which could open the door for many countries to want treaty changes from their points of view which might lead to a very long situation," he said. "We need to deal with this crisis with the facilities and the rules that we have now."
Several countries including Britain, which unlike Germany and Ireland is not a member of the eurozone, have resisted efforts to see more central authority handed to Brussels.
Prime Minister David Cameron, who will hold talks with Merkel in Berlin Friday, lashed out this week against "grand plans and utopian visions" and called for an EU with "the flexibility of a network, not the rigidity of a bloc."
In November 2010, Ireland was forced to seek an €85-billion ($119 billion) rescue package from the EU and the International Monetary Fund to deal with massive debt and deficit problems.
As it gradually recovers, Ireland has pledged to cut its public deficit to 8.6 percent in 2012 and to less than 3.0 percent, the EU ceiling, by 2015, through a stringent mix of spending cuts and tax hikes.