Mrs Merkel agreed a coalition deal with Germany‘s Social Democrats (SPD) last week, following months of tense negotations.
And the 63-year-old, who has been Chancellor since 2005, claimed she had no intention of stepping aside for a new leader yet.
She told TV channel ZDF: “I ran for a four-year term. I promised those four years and I’m someone who keeps promises. I totally stand behind that decision.”
The Christian Democratic Union (CDU) leader admitted she was forced to make “painful” concessions to the centre-left SPD.
Her decision to hand the role of Finance Minister to an SPD politician has sparked fury among Mrs Merkel’s conservative supporters.
But she said her authority had not been damaged by the deal, saying it was an “acceptable” price to pay in order to govern.
She explained: “I understand the disappointment. This is painful with the Minister of Finance.
“It was a conscious decision at a certain point to say: ‘Yes, we can do it this way,’ even though I knew it was painful.
“But a Finance Minister can’t just do what he wants.
“We agreed on a balanced budget, and European policy will be formulated jointly.”
When asked whether she was planning to prepare a successor to lead her conservatives in the next election, Mrs Merkel told the ZDF broadcaster that she would like to see a younger generation fill ministerial posts.
“We need to show that we can start with a new team,” Mrs Merkel said in the interview on Sunday evening.
“We have six ministerial posts to fill and from my point of view we need to ensure that not only the over-60s are considered but also younger people.”
Merkel, who has headed the CDU for almost 18 years, said she doesn’t “sense any decline of authority” and signaled she isn’t about to give up the party chairwoman’s post. She acknowledged the party’s restiveness, saying she intends to promote some young leaders to her next cabinet.
“Now it’s about giving an opportunity to people whose political future is still ahead of them or who are right in the middle of it,” she told ZDF. “We’ll do everything possible to give these people a chance.”