Opening a debate on annual budget in the lower house of parliament or Bundestag, Merkel admitted that the UK's exit from the EU has potential to make the bloc weaker, at a time when it should play a stronger role.
"After the withdrawal of Great Britain, we would have an economic competitor at our door, although we want to keep close economic ties, foreign and security cooperation, although we want to continue our friendly relationship," she said, Anadolu Agency reported.
Merkel called on EU member states to take necessary steps in the coming months, to make the bloc a strong global actor, which would advocate multilateralism.
"Yesterday, Ursula von der Leyen's presentation of the new European Commission shows exactly this," she said. Von der Leyen, a German politician and a close ally of Chancellor Merkel, is president-elect of the European Commission. She is due to take over in November.
Merkel was referring to Von der Leyen, unveiling a new team that included appointment of 26 commissioners on Tuesday. The appointments await confirmation by the European Parliament.
"I believe this is a good start to have a global oriented Commission, which wants to strengthen Europe's role in the world and that wants to address significant issues," the German Chancellor said.