"I don't see them ever joining and I had never believed that it would happen," she said during a televised debate with Martin Schulz, her Social Democratic rival in elections later this month.
She added that she would speak with her EU counterparts to see if "we can end these membership talks".
Merkel's tough stance came after Turkey arrested two more German citizens this past week "for political reasons", infuriating Berlin.
The arrests brought the number of German political prisoners in Turkish custody to 12, at a time when ties between the two NATO allies were already at an all-time low.
The plunge in relations began after Berlin sharply criticised Ankara over the crackdown that followed last year's failed coup attempt.
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