If a week is a long time in politics, eight weeks without agreeing on a new government is surely an eternity.
Since Germany's election on September 22nd, Merkel's Conservatives and the centre-left Social Democrats (SPD) have been inching slowly towards a deal.
But time does not stand still waiting for Germany to get its act together, and the stalemate is beginning to be felt.
Since September, Germany has effectively been run by the pre-election government, albeit with a dramatically reduced mandate.
Finance minister Wolfgang Schäuble, for instance, found himself more or less powerless when forced to travel to Brussels last week for a meeting of EU finance ministers without a mandate to agree a common plan to deal with ailing European banks.
Schäuble opposes using funds from the European Stability Mechanism (ESM) to shore up failing banks, while his future coalition partners in the SPD support the plan - also backed by the European Central Bank and several member states.
The new coalition's tentative draft agreement states: “The CDU/CSU and SPD will consult together on the planned measures, decisions and legal initiatives of individual ministries. This also applies to voting at European level."
If Schäuble must consult the coalition on every point of European fiscal policy, the minister could find himself severely limited in his ability to push forward his own agenda abroad. Many see this uncertainty on a European level as a threat to Germany's traditional leadership role in negotiations.
'Civil servants know what to do'
Despite the impasse, government ministries told The Local their ministers were carrying on as normal.
The education ministry said their minister, Johanna Wanka, had been busy in the coalition negotiations and had appointments most days this week in Berlin, Potsdam and Munich.
And outgoing health minister Daniel Bahr, whose party the FDP was voted out of parliament in September, recently attended a conference in Washington. Meanwhile outgoing economics minister Philipp Rösler, also of the FDP, travelled to Paris on Tuesday for a ministerial conference of the International Energy Agency.
German civil servants can be relied upon to run the show smoothly, said Professor Michael Wohlgemuth, director at think-tank Open Europe Berlin, while the work done by ministries would have eased off over the last two months.
“In some ministries, especially those that used to be run by FDP ministers, the workload has gone down dramatically – whereas anxiety is high on who will keep what kind of job. It is similar with ministries likely to go to the SPD, such as the foreign office and economics," he said.
But Professor Wohlgemuth added: “The people at the finance ministry, who have worked extra hours for years now, are still under stress with EU banking union and keeping track of all the extra billions of expenditure that the new coalition put on its wish-list.”
While Merkel's Conservatives received a ringing endorsement in the election, they fell just short of an absolute majority.
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After negotiations with the Green Party failed, the Social Democrats emerged as the most obvious coalition partner.
But the SDP are not overly enthusiastic about the idea of going into government with the Conservatives, a move that cost them considerable support during the last so-called "grand coalition" between 2005 and 2009.
As a result, the party has entered negotiations determined not to repeat the mistakes of the past, and is taking a firm line in its demands for a nationwide minimum wage of €8.50, an extension of gay rights and measures to fight old age poverty. "We will not pursue politics for a second time in which the SPD again breaches its self-concept," their leader Sigmar Gabriel vowed.
Additional reporting by Louise Osborne and Tom Bristow