BERLIN, March 26 (Reuters) - Turkish President Tayyip Erdogan, who has accused Chancellor Angela Merkel of "applying Nazi methods" against Turks in Germany, is setting back integration in Germany by years, veteran Finance Minister Wolfgang Schaeuble said.

Berlin is growing increasingly frustrated about Erdogan repeatedly accusing it of applying "Nazi methods" by banning rallies aimed at drumming up support among Turks in Germany for a referendum that would strengthen the power of his presidency.

"Erdogan's rhetoric makes me stunned," Schaeuble told the Welt am Sonntag weekly newspaper. "In a short time, it wilfully destroys the integration that has grown over years in Germany. The repair of the damage will take years."

Erdogan said in a speech in Istanbul last Sunday: "Merkel, now you're applying Nazi methods. Against my brothers who live in Germany, and against my ministers and lawmakers who visit there. Would this suit the ethics of politics Your mission is not to support terrorist organisations, but to extradite them."

Germany has a community of some 3 million people with a Turkish background. Turkish voters living here begin casting their ballots in the constitutional referendum on Monday.

Last Tuesday, organisers said Turkish leaders would hold no further campaign rallies in Germany before the referendum - to be held on April 16 in Turkey - after a Merkel ally said they were not welcome.

On Wednesday, Germany's Frank-Walter Steinmeier used his first speech as president to warn Erdogan that he risked destroying everything his country had achieved in recent years.

Erdogan responded by saying that Europeans would not be able to walk safely on the streets if they kept up their current attitude towards Turkey, his latest salvo in the row over campaigning by Turkish politicians in Europe.



(Writing by Paul Carrel; editing by Susan Thomas) ((paul.carrel@thomsonreuters.com; ; +49 30 2888 5216; Reuters Messaging: Reuters Messaging: paul.carrel.thomsonreuters.com@reuters.net))