Despite a fall in infection numbers, new and more contagious coronavirus variants “are spreading especially quickly and require significant additional efforts”, said the document, which still needs to be approved by the leaders of Germany's 16 states.
Merkel and the regional premiers are due to hold crunch talks later on Wednesday on how to deal with the coronavirus situation. The current measures are due to expire on February 14th.
Under Germany's federal system, regional states have significant decision-making powers and some have strayed from the government line in the past to loosen some restrictions.
The draft text stresses that schools and daycare centres should be “the first to gradually reopen”, but that it is for individual states to decide how and when.
Hairdressers could reopen on March 1st, the document suggests, if they take the necessary hygiene precautions.
It also raises the prospect of museums, galleries and some services restarting once the virus incidence rate falls to 35 new cases per 100,000 residents over a seven-day period.
“Whether and when the next opening steps can take place will be decided at the joint meeting on March 10th in the light of the development of the infection figures,” the paper states.
On Wednesday Germany recorded 8,072 coronavirus cases and 813 deaths within 24 hours. The number of Covid-19 cases per 100,000 residents in the last seven days stands at 68.
“We would gain nothing if we left lockdown prematurely,” Merkel told members of her CDU party on Tuesday, according to participants at the meeting.
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Do we know anything for certain at this stage?
No. This is what the government is aiming for but it has to be approved by the leaders representing the 16 federal states.
So it's not certain that the shutdown will be extended until mid-March, although it does look like it will be extended in some form. State leaders may try and bring this date forward to March 7th or the end of February.
We'll find out more after the meeting takes place on Wednesday.
Germany closed restaurants, hotels, culture and leisure centres in November, before adding schools and non-essential shops to the list in December.
Households are allowed to meet with one other person, and the government has urged people to reduce contact to the minimum.
Meanwhile, Baden-Württemberg's state premier Winfried Kretschmann (Greens) dampened hopes of quick relaxations of the rules.
If the state-wide incidences are below 50 new infections per 100,000 inhabitants over a certain period of time, cautious opening steps will be taken, he told the Badische Zeitung.
“But no one can expect us to start opening everything right away,” he said, adding that the situation is too fragile for that.
He added: “The experiences of other countries show: Opening up too early leads to setbacks and thus to even tougher measures.”