Tensions flared after German authorities refused to allow some Turkish ministers to campaign for a 'yes' vote in the April 16 referendum on expanding Erdogan's powers, and he responded by saying Berlin was behaving like Nazi Germany.
"When we call them Nazis they (Europe) get uncomfortable. They rally together in solidarity. Especially Merkel," Erdogan said in a televised speech.
"But you are right now employing Nazi measures," Erdogan told Merkel using the informal 'you' in Turkish.
Authorities in Germany have blocked some Turkish ministers from holding rallies, infuriating Ankara.
Erdogan said the crisis in relations with Europe over the last days "showed that a new page had been opened in the ongoing fight against our country."
Accusing Europe of backing outlawed terror groups, he warned: "The masked ball is over!" without specifying further.
Turkey had earlier expressed fury that German authorities had yesterday allowed a pro-Kurdish demonstration in Frankfurt to go ahead where many participants carried insignia of the outlawed Kurdistan Workers Party (PKK).
Erdogan described Yucel, whose arrest has caused global concern, as a "terror agent" and "supposed journalist" and accused Germany of hosting him for one month at its Istanbul consulate before he went to police for questioning.
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