Her Social Democrat (SPD) coalition partners oppose the idea.
Thousands of protesters in the anti-immigration Pegida movement have staged another big rally in Dresden.
An estimated 9,000 attended the rally in the eastern German city - the focal point of Pegida`s protests.
The movement includes many anti-Islam and far-right activists. A co-founder of Pegida, Lutz Bachmann, has been charged with inciting racial hatred, after he labelled asylum seekers as "trash" and "animals" on Facebook.
Pegida (Patriotic Europeans Against the Islamisation of the West) has staged many rallies in recent months, attracting tens of thousands of people.
They scorn Ms Merkel`s policy of welcoming refugees fleeing war and persecution.
More about:
