Ms Merkel says she feels no guilt over the recent violent attacks in Germany, and was right to allow hundreds of thousands of migrants and refugees into the country.
Germany is a country on edge.
In the space of a week there was an axe attack on a train, a mass shooting in Munich, a machete attack on a pregnant woman and a suicide bomb in Ansbach.
Three of the attacks were carried out by refugees or asylum-seekers, prompting some to blame the German Chancellor Angela Merkel's 'open door' immigration policy.
Ms Merkel says she was shocked by the violence but it's important fear and division don't win.
"We are now being tested. We are tested in the way we live; our understanding of freedom and security is being tested. Again and again we have to balance those values. What the terrorists want is for us to lose our view of what's important to us. They want to divide our unity, our cooperation. They want to harm our life and our openness. And they want to prevent our openness to welcome people. They spread hate between cultures."
In September last year, Germany opened its borders to more than 10,000 refugees and asylum-seekers stranded in Hungary.
Ms Merkel says while recent events have caused uncertainty in the region, they shouldn't be allowed to destabilise inclusive policy.
"The events caused a lot of uncertainty. People are in doubt and people are scared. This is quite clear but anxiety and fear can't advise us for political decisions. I will do everything possible to prevent such attacks."
Earlier this week Bavaria's leader, Minister-President Horst Seehofer declared that Germany had become the latest battleground for Islamist terrorism.
"Each attack, each act of terror, is one too many. Islamist terrorism has arrived in Germany. The people are rightfully expecting that we boldly meet this challenge."
France has also suffered a wave of violent attacks in recent weeks, leaving authorities and security experts debating how to best deal with the threat.
French security advisor Professor Francois Heisbourg is from the Foundation for Strategic Research.
He says the current approach may not be working.
"The government has locked itself into a repetition of what it has already done, that is - more state of emergency, more soldiers, more bombing against Raqqa or Mosul. These three things did not work in the past, it is unlikely that they're going to work much better in the future."
