Germany already pays out £12.3billion (€14billion) more than it receives back from the Brussels.
And the bloc is facing an approximate shortfall of £17.6billion a year once Britain leaves the EU and no longer contributes its annual £13.1billion to the budget.
But now the President of Germany’s Chamber of Commerce (DIHK) Eric Schweitzer has warned the nation’s taxpayers could foot the bill if Mrs Merkel is forced to pour more money into the bloc to keep the European Project alive.
A paper published by DIHK claimed “Germany alone will be facing increased contributions of up to eight billion euros per year” if the EU refuse to cut spending.
It added any increase in contribution from the EU powerhouse would “burden companies and other taxpayers” in Germany.
The revelation could offer leverage to UK negotiators as they attempt to broker the final deal with the bloc.
It comes as Mrs Merkel attempts to usher in Brexit amid claims German exports are being crippled by political uncertainty.
Meanwhile the embattled German Chancellor is attempting to strike deal of her own as she attempts to form a government following a breakdown in coalition talks.
Speaking in Brussels at the EU summit, Mrs Merkel warned the UK and EU still have much to agree on in Brexit talks.
The German Chancellor warned “time is of the essence” with trade talks set to begin in the new year.
Speaking to the Today programme, she said: “We have been dealing with the Brexit issue and it is clear that Theresa May has made a good proposal.
“We will suggest to the 27 members that sufficient progress has been made but we still have much work to do. And time is of the essence.”
Earlier this week German industry insiders revealed they are terrified of Brexit with exports to the UK down by almost a quarter of a billion euros.
Mechanical engineering firms are feeling the pinch with exports to the UK plunging by nearly five per cent to €5.46billion (£4.8billion) between January and September.
Exports to all other nations have shot up in the past year but the UK – the country’s primary market – has seen a dramatic slump, according to the German Federal Office of Statistics.
Carl Martin Welcker, president of the German Engineering Association VDMA, told Die Welt the situation was a “complete bust” and it was all down to Brexit.
He said: “We don’t know what kind of access to goods, services, capital and people will be available after Great Britain leaves the EU.
“As long as there is no clarity our companies will suffer.”
(Additional reporting by Monika Pallenberg.)