Athens is in talks with its major international creditors attempting to unlock financial aid to avoid a default on its multibillion-dollar debt before the expiry of the current bailout program on June 30.
"From what I have heard today ahead of the meeting of finance ministers, we have not made necessary progress yet. There is even an impression that we have moved somewhat backwards on many points," Merkel said.
Therefore, it is "very important that Greece continues work" with its creditors, namely the European Central Bank, the International Monetary Fund and the European Commission, she added.
Following several failed attempts to come to agreement on Greece debt settlement, the Eurogroup and Athens will resume the talks later in the day.
I am sure #Merkel knows this, but if the talks fail over (economically misguided) cuts of 2.5 bn p.a., world will blame her, not #Greece.
— Christian Odendahl (@COdendahl) June 25, 2015
During Wednesday negotiations, Greece reportedly rejected counter-proposals by the international creditors, including value-added tax increases and pension cuts.
Greece's overall debt stands at about $350 billion, of which $270 billion is owed to its three major lenders.