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|Turkish President Recep Tayyip Erdogan waved while sat with his wife Emine Erdogan after arriving at Berlin's Tegel airport. (Photo: AFP/Odd Andersen)|
Erdogan was on a state visit to the top EU economy, home to three million people of Turkish descent, in what German media have described as a charm offensive.
Turkey is suffering economic turbulence aggravated by US sanctions stemming from a row with US President Donald Trump.
The three-day visit is being held under tight security, with over 4,000 extra police deployed in Berlin, as several protests were planned against the Turkish leader under the banner "Erdogan Not Welcome".
In a first rally, hundreds of mostly ethnic Kurdish demonstrators marched in Berlin with banners that showed likenesses of Erdogan shooting a journalist and devouring a peace dove.
Merkel and Erdogan meanwhile stressed the need to rebuild traditional ties that hit a historic low after a 2016 failed coup and subsequent crackdown in Turkey.
The two NATO allies agreed to jointly discuss the Syria crisis in a meeting next month with Russian President Vladimir Putin and Emmanuel Macron of France, Merkel said at a joint press conference.
But the gulf between them remained apparent on issues from press freedom to the fate of German or dual citizens being held behind bars in Turkey, and on whether Germany should extradite Erdogan's declared foes.
Merkel, under pressure at home for giving Erdogan the red-carpet treatment, said there was "on both sides a joint strategic interest in good relations" despite "deep differences ... especially in questions about a democratic, open society".
But she stressed that continued dialogue was the best way to overcome those differences.
She also vowed to keep pushing for the release of five German citizens still being held in Turkey.
At the height of the crisis, Berlin had urged its citizens and companies to stay away from Turkey and pulled out its troops from a NATO base.
However, relations have thawed since Turkey in February released prominent German-Turkish journalist Deniz Yucel.
Trump in August raised tariffs on Turkish aluminium and steel, in retaliation for the detention of an American pastor on terrorism charges in Turkey.
On Turkey's economic woes, Merkel said that "Germany has an interest in an economically stable Turkey".
Erdogan, who at the height of the diplomatic crisis had accused Berlin of "Nazi" style practices, also struck a conciliatory tone, pointing to "win-win" business projects on the horizon.
ROW OVER JOURNALIST
However, Erdogan also said Germany was doing too little to deal with thousands of Kurdish militants on its soil.
And he complained that Germany was refusing to extradite followers of Muslim cleric Fethullah Gulen, whom he blames for the coup attempt.
Merkel said Germany regards the Kurdish Workers Party (PKK) as a banned militant organisation but was not convinced it should treat the Gulen movement the same way.
Ahead of Erdogan's arrival, Turkey handed Germany a list of 69 people it wants extradited, among them alleged PKK and far-left activists and Gulen followers.
Also on the list was journalist Can Dundar, who has lived in Germany since 2016. He is evading a jail sentence for his Cumhuriyet newspaper's reporting on alleged secret Turkish arms deliveries to Islamist rebels in Syria.
Erdogan told reporters that Dundar "is an agent, he is a person who has disclosed state secrets".
"It is our natural right to want the extradition of a guilty individual," he said.
In a press conference of his own, Dundar strongly denied the allegations.
"I am not an agent, I am a journalist," he said.
Later, in a speech at a dinner in his honour, Erdogan reproached Germany, in fairly undiplomatic language, for protecting the likes of Dundar.
"When journalists are involved in acts of terrorism and have been condemned by a Turkish court, how can anyone still defend them?" he asked.
"And here he gets a nice role," he added.
Erdogan was responding to comments, at the same dinner, by German President Frank-Walter Steinmeier who voiced concern at the imprisonment of journalists, trade unionists, scientists and intellectuals in Turkey since the 2016 failed coup.
I think you have received false information," Erdogan said.
The Turkish leader heads for Cologne on Saturday for the inauguration of a new mosque.