However, the Chancellor did stick to her guns and insist the country could not accept the prospect of sharing the European debt without gains in competitiveness.
She said: “We have made clear in our coalition agreement that we are ready to provide more money for the EU budget.”
Suggesting that other countries’ debts could be mutualised too if other EU members improve their competitiveness, she added: “What is not on is to confuse liability and responsibility, or to simply mutualise debts without becoming competitive.”
A mutualisation would mean a transfer of peripheral fiscal risks and obligations from the EU to a national government’s balance sheet, which may result in tax increases.
Mrs Merkel was sworn in today for a fourth and likely final term as Chancellor and she vowed to get to work quickly after the longest period of political negotiations in post-war Germany.
The formation of her coalition, which took nearly six months to complete, resulted in an agreement between her conservative CDU/CSU bloc and the centre-left Social Democrats (SPD).
The long coalition building weakened her position and her standing with her own party, which lost thousands of votes to the rightwing Alternative for Germany (AfD) and had to concede to SPD the foreign and finance ministries.
Her coalition now has 399 votes in the Bundestag lower house of parliament.
Mrs Merkel said: ”That is our aim, that we make AfD smaller and get them out of the Bundestag again insofar as is possible.
“We want a coalition that appeals to all people in the country.”
Mrs Merkel has been in office since 2005 and she remains one of the key players of the EU, together with French President Emmanuel Macron and his predecessor Francois Hollande.