The Bundestag is to debate the issue on Friday, after the SPD chose to break with past practice and go against its coalition partner.
Her coalition partners the Social Democrats (SPD), as well as the Greens, far-left Linke and pro-business Free Democrats, have declared same-sex marriage as a red-line demand and condition for entering into any future coalition.
When asked about equal marriage yesterday (June 26), Merkel replied: "I would like to steer the discussion more towards the situation that it will be a question of conscience instead of me forcing something through by means of a majority vote".
Gay couples in Germany are now allowed enter civil unions, but do not have all the rights guaranteed to married couples.
Merkel believes the USA should take into account that "BMW has its largest production site not in Germany but in the United States ... and exports more cars from there into third countries than Ford and General Motors combined".
She said her thinking had changed after a "memorable experience" when she recently met a lesbian couple who lovingly care for eight foster children in her Baltic coast constituency.
But shortly afterwards, news broke that Merkel had indeed told her party MPs they could decide freely on the issue.
Angela Merkel has voiced support for a free vote on same-sex marriage.
"That was the USA secretary of commerce, who had promised us a 10-minute statement", the head of CDU Economic Council Werner Bahlsen said.
The CDU and CSU voted against the decision and accused the SPD of a breach of trust.
They acted after Merkel had on Monday night dropped her long-time opposition to the reform, sparking widespread calls for a speedy vote.
In an interview with the live talk show Brigitte, Merkel said she would allow for a conscience vote in the Bundestag, which will likely lead to marriage equality in the European Union's biggest and wealthiest country. "But the CDU/CSU have been forced into a corner and all the joy has been drained", Die Welt daily wrote. The real issue has been pushed into the background.
Its co-leader Frauke Petry said the AfD stands for "traditional family values" and sarcastically thanked Merkel for abandoning another conservative position "for purely tactical considerations".
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