BERLIN (Reuters) - Chancellor Angela Merkel said on the eve of talks with President Tayyip Erdogan that Germany wanted to work with Turkey economically, but added she would also raise sensitive issues of human rights and prisoners with him.

Relations between the two countries have been badly strained in recent months, and Turkey has been rocked by economic crisis. Erdogan is eager to use his three-day visit to rebuild trade ties.

During a panel discussion late on Thursday, Merkel ruled out direct aid for Ankara. “But we have to work together economically, and we’ll certainly manage to get some agreements here,” she said, without elaborating.

The center-right leader said she would address both the human rights situation and the fate of German prisoners in Turkey during her talks with Erdogan on Friday and Saturday.

“The human rights situation is not how I’d like to see it,” Merkel said.

In an article by Erdogan published by Germany’s Frankfurter Allgemeine daily as he began his three-day visit, the Turkish leader urged Berlin to designate the group he blames for a 2016 coup attempt as a terrorist organization.

Germany has so far said it needs more evidence to link the movement of the Muslim cleric Fethullah Gulen, who lives in the United States, to the attempt to overthrow Erdogan.

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DISSIDENTS IN GERMANY “SPIED ON”

The Gulen issue is only one of several dividing Turkey and Germany. As Erdogan was whisked through a locked-down city to his hotel by the Brandenburg Gate, allegations that a Berlin police officer had been spying on exiled dissidents for Turkish security services highlighted the two sides’ mutual mistrust.

Germany’s refusal to extradite military officers whom Turkey accuses of participating in the coup attempt, after they claimed asylum, enraged Ankara. Berlin is concerned about the fate of tens of thousands of people imprisoned in the subsequent crackdown, who included dozens of German citizens.

But with Turkey’s economy in crisis and Germany home to three million ethnic Turks and reliant on Turkey to help contain a Syrian migrant crisis beyond Europe’s borders, both sides want to put their differences aside.

“We are pursuing the goal of increasing our trade and economic ties,” Erdogan wrote in Frankfurter Allgemeine. “For the sake of prosperity and the future of both our countries, let us increase our mutual interests and reduce our problems.”

Erdogan will meet Chancellor Angela Merkel three times during his state visit. Berlin is wary of conceding too much, too fast.

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“This visit isn’t a sign of normalization,” Erdogan’s host, President Frank-Walter Steinmeier, told the RND newspaper group. “But it could be the start of it. After the trauma of the 2016 coup attempt, we expect a return to the rule of law.”

After years of breakneck growth, Turkey has seen its heavy foreign debt load increased by a lira slide of 40 percent this year - a sell-off that intensified after President Donald Trump imposed sanctions in retaliation for Turkey’s detention of a U.S. pastor.

“SO IMPORTANT, SO DIFFICULT”

Hours before Erdogan landed, demonstrators gathered at the airport, protesting over the lack of press freedom in Turkey, where dozens of critical journalists are jailed. Others were waiting near his hotel.

“We have to talk to each other,” junior foreign minister Michael Roth told German radio. “There can’t be another country outside the European Union with whom relations are so important and yet so difficult.”

Both sides have dismissed suggestions that Turkey could seek financial aid from Germany or the EU. But a rapprochement could unlock investment from German manufacturers who have been deterred by Turkey’s recent volatility.

German authorities fret at Erdogan’s influence over German Turks and have warned him against campaigning overtly when he opens a mosque on Saturday in Cologne, home to one of Germany’s largest Turkish communities.

Ankara plays close attention to its diaspora communities worldwide. Just how close became clear when Berlin police announced that an officer was suspected of reporting to the Turkish security services. The Tagesspiegel newspaper said he had leaked the address of a Berlin-based dissident.