Federal Commissioner for Culture, Bernd Neumann, told a two-day conference in Berlin that the government had rejected calls from some museums to impose deadlines.
The conference, Taking Responsibility, was held to mark the 10th anniversary of the Washington Declaration, in which 44 countries agreed to identify and return Nazi-looted art.
Assessing how much progress had been made, Mr Neumann admitted that German museums and collections had been dragging their heels.
Anne Webber, co-chair of the Commission for Looted Art in London, said: “There are thousands of looted works in German museums but they have been very reluctant to do anything. They complained that it cost money to research their provenance, because there were so many.
“The German government had attempted to encourage them by offering one million euros annually. But more than half the money has not been spent, which means the museums are not applying for it.
“We want the publication of lists of works of art acquired between 1933 and 1945 to be published so that people can see for themselves what is being held by museums and then make claims.
“We would also call on museums to publish their research as they progress, rather than waiting for it to be completed, which could take years.”
Ms Webber said the attitude of many museums was summed up by Dr Michael Eissenhauer, president of the German Museums Association, who told the conference that publishing lists could see a rush to get items back.
The 44 Washington signatories agreed to meet again in Prague next June when the Czech Republic has the presidency of the EU.