In a separate interview with broadcaster ZDF, Merkel said she is "skeptical" about such a government."Germany needs a stable government that doesn't need to search for a majority for every decision", she said.Merkel also said she was still prepared to serve as chancellor for another four years, assuming a viable coalition can be formed.
While President Frank-Walter Steinmeier said he doesn't favour snap elections, the clock is ticking.
Merkel's current coalition partner, the centre-left Social Democratic Party (SPD), has repeatedly rejected rejoining a new alliance headed by the chancellor after it suffered its worst result since 1949 in the September election.
The politician noted that the discussions on whether Germany would hold a new election or form the minority government were speculations.
He made a thinly veiled appeal to the Social Democrats (SPD) to rethink their refusal to form a government with Merkel after voters punished them for sharing power with her for four years.
Germany's president has urged Angela Merkel and political leaders to get back to the negotiating table and compromise after talks to form a government collapsed, leaving Europe's biggest economy in limbo. But the plan fell apart when the liberal Free Democratic Party (FDP) walked out of talks shortly before midnight on Sunday over disagreements on issues ranging from energy policy to migration.
But after her efforts failed, only two options remain: forming a minority government or holding a new election.
She said that she "will do everything to ensure that this country is well-led through these hard weeks".
The chancellor said on Monday that she would prefer early elections rather than the uncertainty of a minority government.
It is likely to be a while before the situation is resolved.