US official Victoria Nuland was recorded saying "Fuck the EU" while discussing the crisis in Ukraine with the US ambassador to the country.
A recording of the tapped telephone conversation was posted online.
It comes as the EU and US are in talks to end months of unrest in Ukraine between the opposition, who want the country to become closer to the West, and the government who turned down a deal with the EU late last year under Russian pressure.
"The chancellor considers this statement absolutely unacceptable … and wants to emphasize again that [EU foreign policy chief Catherine] Ashton is doing an outstanding job," Merkel's spokeswoman said. "The European Union will continue with its intensive efforts to calm the situation in Ukraine."
The German press has played down Nuland's use of the expletive to described the EU.
Online news site Speigel ran an opinion piece headed “Calm down, Europe”.
In it, the author puts forward the argument that the word “fuck” is thrown around freely in the US, especially in high-pressure situations.
“Europe needs to just laugh about the American F-word. A bit of humour wouldn't go amiss in transatlantic relations," it said.
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