Despite increasing their share of the vote by 16 percent in Sunday's election, Merkel's CDU and CSU sister party came just short of the majority needed to rule alone. This will be especially vital when it comes to passing future eurozone bail-outs.
The downfall of Merkel's previous coalition partners, the Liberal FDP, has left her no choice but to reach out to her political adversaries on the left to build a majority government.
But by Wednesday neither the main opposition Social Democrats (SPD) nor the Green party had shown any enthusiasm for sharing power with Merkel's CDU - a move many in both parties consider political suicide.
With the Chancellor keen to secure a partner to avoid having to call fresh elections, all eyes are fixed on an SPD vote scheduled for Friday where the party leadership will vote on whether they want to form a coalition with Merkel.
"The SPD is not queuing up or competing [to join government] after Merkel has just ruined her current coalition partner," said SPD chairman Sigmar Gabriel on Monday, as it became clear the majority of members were against forming a so-called 'grand coalition' with Merkel.
Hannelore Kraft, state premier of SPD-stronghold North-Rhine Westphalia, has emerged as the head of a movement to reject a coalition after penning a resolution on Tuesday stating the SPD should not prop up a CDU-dominated government. The SPD paid sorely for the last grand coalition formed with Merkel in 2005, losing 76 seats at the 2009 election.
Only the party's left-wing is proposing to topple Merkel by forming a coalition with the Green party and the socialist Left party, an option the SPD leadership has repeatedly rejected, citing questionable democratic credentials among Die Linke's membership.
Meanwhile, the party's right-wing is pushing the Green Party forward. "I think it's the Greens turn now," Johannes Kahrs, spokesman for the SPD's right-leaning party group Seeheimer Kreise told ARD broadcaster on Wednesday.
But outgoing Green Party leader Cem Özdemir said on Wednesday he thought Merkel would not offer his party the kind of concessions necessary for a coalition, which would have to be "much, much bigger" than those needed to win round the SPD.
The CDU/CSU Union party meanwhile, the winners of Sunday's vote, ironically has to offer major compromises.
"Of course we'll have to be willing to compromise in all areas. Otherwise we won't form a coalition," CDU vice Armin Laschet told Welt newspaper.
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Yet if neither party steps up, Merkel's CDU faces an unpleasant choice. Either it must form an uncomfortable minority government which would have to seek majorities for each individual vote, or opt for the most extreme outcome - calling fresh elections.
Already, some in the party are calling for just that. "[A minority government] cannot work," CSU parliamentary chairman Stefan Müller told Bild on Wednesday. "If the [SPD and Greens] tactically refuse to take responsibility for the good of our nation then we will have to vote again," agreed CDU member of parliament Christian Hirte.
The most likely outcome is still a grand coalition between the CDU and SPD but that could be many weeks away.