Speaking at the Economic Summit in Berlin on Tuesday, Merkel showed understanding for the heavy strain that residents in Germany are under during the crisis, reported Spiegel.

Merkel said she was aware that the contact restrictions in particular were a “burden on democracy”. But they are unavoidable, she stressed.

“These decisions are among the most difficult of my term in office,” said Merkel.

Nevertheless, Merkel called for more effort from people in the fight against the coronavirus pandemic. “At the moment the situation remains serious, I would even say very serious,” she said.

On Monday state leaders put a brake on the federal government's draft proposals to introduce new measures to control the spread of coronavirus.

Merkel had hoped to push through new measures, such as tougher contact restrictions and halving class sizes in schools.

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The Chancellor said she would have preferred to implement these stricter lockdown measures. Instead, the government and states agreed to put plans on hold and urgently recommended that people cut down on contacts. The discussion will be resumed next week.

“Every day counts in the fight against coronavirus,” said Merkel. “If we waited until the intensive care beds were fully occupied, it would be too late.”

Merkel said infection numbers weren't growing exponentially anymore, “but are still far too high. So we have to reduce contacts, reduce contacts, reduce contacts.

“I do regret that things sometimes move a little too slowly.”

There were around 14,400 new cases reported in Germany within 24 hours on Tuesday, bringing the total amount of cases to 815,746.

The death toll rose by 267 within 24 hours. More than 12,800 people have died due to Covid-19 since the start of the pandemic.

The Chancellor said 30 to 40 percent of the population belong to a risk group, so protecting people has to be taken seriously.

The fight against the pandemic is not a purely medical issue, but also an ethical, economic and social one, she said.

Merkel predicts 'strong growth spurt' for 2021

The Economic Summit will discuss whether Germany can succeed in finding a way out of the coronavirus crisis in 2021.

Despite her serious address, Merkel was also optimistic about a vaccine.

READ MORE: How Germany is preparing for the coronavirus vaccination

As far as the economy is concerned, the Chancellor believes there will be recovery next year.

“We expect a strong growth spurt in 2021, provided we get the pandemic under control,” she said.

The government will continue to provide financial support to large and small companies. “We are prepared to accept extraordinary new debt,” she said.

Merkel urged firms to hold out. The winter will be a “tough dry spell for some industries”, she said, especially with regard to the catering and entertainment sector.

The path out of the crisis would be difficult, but could be successful, she said. In the end, it's important to weigh up all coronavirus restrictions against economic and social issues.

It's not a question of deciding between health or economy and culture, but of thinking about all sectors together.

“These measures serve everyone,” said Merkel: “A well-controlled pandemic is best for the economy.”