Reports last October - based on disclosures by former U.S. intelligence contractor Edward Snowden - that Washington had monitored Merkel's mobile phone caused outrage in Germany, which is particularly sensitive about surveillance because of abuses under the East German Stasi secret police and the Nazis.
Berlin subsequently demanded talks with Washington on a "no-spy" deal, but it has become clear in recent months that the United States is unwilling to give the assurances Germany wants.
"The information we have so far is insufficient," Interior Minister Thomas de Maiziere, one of Merkel's closest cabinet allies, told German weekly magazine Der Spiegel.
"U.S. intelligence methods may be justified to a large extent by security needs, but the tactics are excessive and over-the-top," de Maiziere added.
Asked if he expected progress before Merkel pays a visit to President Barack Obama in early May, de Maiziere said: "My expectations of what further talks will yield are low."
Obama visited Europe late last month, saying one of his aims was to reassure allies that he was acting to meet their concerns on the scope of U.S. data gathering.
In January, Obama banned U.S. eavesdropping on the leaders of close allies and began reining in the vast collection of phone data on Americans. But he also said U.S. intelligence agencies would continue to gather information about the intentions of other governments.