Merkel rebuked the UK government for giving the green light to 60,000 crowds.
Wembley will be 75% full for the final and semi final which has prompted the German leader to slap down Boris Johnson over the plans.
During their talks at Chequers, Angela Merkel said she raised the issue with prime minister.
“I say this with grave concern. I have also said this to the Prime Minister,” she told a joint news conference.
“We in Germany, as you know; have less people attend games in the Munich stadium but the British Government will obviously take its own decision.
“But I am very much concerned whether it is not a bit too much.”
In Germany, the Allianz stadium in Munich has been limited to 20% capacity meaning only 14,000 fans; have been able to attend the 75,000 capacity ground.
But Boris insisted sporting events were being opened up in a “very careful and controlled manner” in the UK.
Speaking at the news conference he added: “The crucial point is that here in the UK we have now built up a very considerable wall of immunity by our vaccination programme.
“In the UK almost 85% have had a first dose and more than 63% have had two jabs. Since you get more than 80% protection; from one dose and 93% protection from two doses there is a very great degree of resistance to (the) virus in the UK population.”
He said there had been “a big change” in the relationship between the numbers of cases; the numbers of serious illnesses and deaths since the start of the vaccination programme.
“I want to stress that we have been very cautious at every stage. But that’s why I think it’s been effective and it’s why; it’s been an irreversible road map (out of lockdown),” he said.
On a lighter note he also teased Mrs Merkel on England’s Euro 2020 victory over Germany.
The Prime Minister joked Germany had broken with its “tradition” of beating England in football tournaments following the historic 2-0 victory; for the Three Lions in the last-16 match at Wembley on Tuesday evening.
Noting Mrs Merkel’s 22 visits to the UK during her time in power, the Prime Minister told the press conference: “In the course of that time some things have changed beyond recognition but for much of your tenure it was certainly a tradition; Angela, for England to lose to Germany in international football tournaments.
“I’m obviously grateful to you for breaking with that tradition, just for once.”
Mrs Merkel said the result was “deserved” but admitted it made her country “a little bit sad”.
She said: “Obviously this was not a voluntary offer on my side to create the right mood for this visit but I have to accept it.”
During the group stages of Euro 2020 matches crowds were limited to 22,500.
The World Health Organisation said on Thursday that crowds at Euro 2020 stadiums and in pubs and bars in host cities were driving the current rise in coronavirus infections in Europe.
Scottish authorities said on Wednesday that nearly 2,000 people who live in Scotland; have attended a Euro 2020 event while infectious with COVID-19; with many heading to London for Scotland’s group stage match against England on June 18.