“There's the danger that the dictatorial system of the deposed President Mubarak is simply resurrected with other people,” Niebel told the daily Berliner Zeitung.
He said in light of the precarious political situations in Syria, Lebanon and Jordan, instability in Egypt presented an enormous threat to the region's security.
Niebel said the German government had limited contact with Egyptian officials following Morsi's recent attempt to extend his presidential powers by decree. Planned debt relief had also been postponed indefinitely.
But if Cairo returned to the path of democracy, he said Berlin was prepared to help.
“It's up to the Egyptian government,” Niebel told the paper.
Morsi, backed by the Muslim Brotherhood, is currently trying to push through an Islamic constitution despite widespread opposition in the population. In a first round of voting marred by low turnout and irregularities, a narrow majority supported the new constitution this weekend.