Merkel said it was normal in politics to "stake out terrain" ahead of a summit such as the 22-23 November meeting of EU leaders to discuss the EU's €1 trillion spending plan.
But a day after British Prime Minister David Cameron came under pressure in Parliament to act tough on the EU budget and France waved its veto threateningly, Merkel said: "I don't want to throw more vetoes into the room, it doesn't help bring about a solution."
Proposals to reduce the 2014-2020 budget have disappointed some richer member states which want to cut their contributions even further as they struggle to reduce their debts. But they have angered countries such as Poland that rely heavily on EU funding for economic development.
Merkel visits Cameron next week after his humiliating defeat in Parliament on Wednesday at the hands of Eurosceptic rebels in his Conservative party, who are not satisfied with his push for a freeze in spending.
Paris has also threatened to block a deal - in anger at proposals to trim the Common Agricultural Policy - as has Denmark, which wants a rebate on its contributions similar to those negotiated by first Britain then Germany, Sweden, the Netherlands and Austria.
Merkel was speaking at a news conference with Irish Prime Minister Enda Kenny, who takes over budget mediation in January as the next holder of the rotating EU presidency. Cyprus, the current president, has proposed a compromise involving budget cuts of more than €50 billion.
Cameron reiterates veto threat
Cameron, speaking in London on Thursday, said he would listen to Parliament after British lawmakers voted in favour of cutting the EU budget, and reaffirmed his promise to use Britain's veto if necessary.
But he added that Britain was already taking a tough position on the EU budget - where it is pushing for a real terms freeze that would allow the long-term spending plan to rise only in line with inflation.
"Of course, I will listen carefully to parliament but we should be absolutely clear that this government is taking the toughest approach to the EU budget of any government in this country's history," Cameron told reporters.
"If we don't get what I consider a good deal for Britain, I will have no hesitation in vetoing the multi-year financial package - it won't happen."
Wednesday's non-binding defeat was Cameron's first significant parliamentary loss and saw the opposition Labour Party join forces with anti-EU rebels in the prime minister's Conservatives.
Cameron said he would "like to achieve a deal" in Brussels at the summit later this month and take it to the British Parliament for approval.
