Merkel and Cameron also spent Saturday, the second day of their meeting, discussing global topics of concern such as the war in Syria, and Iran's nuclear program.

The trip was part of Cameron's push to renegotiate Britain's relationship with the European Union, and create substantial reform within the bloc itself. According to a Downing Street spokesperson, both Merkel and Cameron have a similar vision on the latter.

"On the EU, the PM [Cameron] set out his approach to European reform, following on from his speech in January. They agreed on the urgent need to make Europe more competitive and flexible and talked about ways to achieve this. And they discussed how we can work together in the run up to the May and June European Councils to make further progress," said the spokesperson.

Earlier this year, Cameron announced plans to negotiate a new settlement for Britain and hold a referendum on EU membership by 2017 - if he wins re-election in the mean time. His Conservative Party includes a strong euroskeptic wing.

Both Merkel and Cameron want the EU to have an "ambitious offer on the table" when talks get underway with the US on trade deals later this year.

Tax fight

Central to Saturday's discussions was a plan to take the issue of tax evasion to upcoming bloc meetings. Both Merkel and Cameron hope to convince other world leaders to unify standards for taxing international businesses at the Group of Eight summit in Northern Ireland, to be held in June.

"[They discussed] especially how the G8 countries should show global leadership by taking concrete action on tax evasion and aggressive tax avoidance and making clear that everyone must pay their fair share of taxes," said Downing Street.

"They will also work together at the May European Council and the G20 to achieve wider progress on global standards for the exchange of tax information."

The talks come a week after several Western newspapers published leaked information pointing to offshore accounts held by 130,000 prominent figures around the world.

Many of the tax havens named in the so called "Offshore Leaks" are British sovereign territories.

'Grave concerns' on Syria

The German and British leaders focused on international problems like Syria's ongoing civil war, the security handover in Afghanistan, and Iran's nuclear program. Cameron updated Merkel on recent trilateral talks with Afghan President Hamid Karzai and Pakistani President Asif Ali Zardari.

"On Syria, they share grave concerns about the deteriorating situation and the ongoing bloodshed. They agreed that the UK and Germany should keep working together to find ways to increase the pressure on [Syrian President] Assad and his regime while also strengthening the moderate opposition," according to the Downing Street spokesperson.

The two-day meeting began on Friday, with Cameron and his family staying at Meseburg Palace, a guesthouse of the German government, about 70 kilometers (43.5 miles) southwest of Berlin. The trip returns one Merkel took in 2010 to Chequers, the Buckinghamshire retreat of the British prime minister.

jr/kms (dpa, AP)