Merkel calls for 'balanced' EU approach on Turkey

German Chancellor Angela Merkel has called for a balanced policy towards Turkey ahead of a key summit of EU leaders set to start Thursday.

Addressing lawmakers during a Wednesday budget debate, Merkel voiced concern over recent tensions between Turkey and EU members Greece and the Greek Cypriot administration, also underlining the importance of continued cooperation with Turkey on issues of common interest.

"Turkey is our partner in NATO. Turkey's achievements accommodating refugees are really amazing and remarkable, probably it is hosting the largest number of refugees worldwide," she underlined, adding that almost 4 million Syrian refugees live in the country.

EU leaders are set to gather in Brussels on Thursday for a two-day summit that will focus on international issues, recent tensions in the Eastern Mediterranean and the future of EU-Turkey ties.

The chancellor stressed that EU-Turkey relations are multifaceted, covering various areas of common interest. She signaled that her government would not support calls by Greece and the Greek Cypriot administration to impose strong sanctions against Ankara.

"We have to weigh very carefully how we can contribute to resolving the disputes, but also how we can find a way to strengthen our cooperation," said Merkel.

"We have to rebalance our relationship with Turkey, but also continue our cooperation in many important areas."