France and Germany mark treaty
They went on to lay the foundations of Europe's economic and monetary union, a project that France hoped would harness German power after reunification in 1990.
The return of a French Socialist government under Hollande has led to tension between Paris and Berlin.
But after a brief flirt with Italy and Spain in mid-2012 that spawned talk of an anti-German southern bloc within Europe, Mr Hollande has turned back to Berlin, keen not to be lumped too closely with the euro's troubled periphery at a time when France's own economy is wobbling and in need of reform.
After six months of earnest handshakes, the two leaders now kiss each other on the cheek when they meet. At a dinner in the chancellery on Monday, they began using the familiar "du" and "tu" form with each other, according to aides.
Mr Hollande pointed to the fiscal compact on budget discipline, a December deal on banking supervision and the agreement to keep Greece in the euro zone as fruits of his strong relationship with Dr Merkel.
"It has not escaped you that we do not belong to the same political family. Despite that, if you look back at the past eight months, I'm very happy with what France and Germany have been able to accomplish to get the euro zone out of its crisis," the French leader said. "If you look at the results, it's clear we're on the same wavelength."
Dr Merkel, who refused to meet with Mr Hollande during last year's French election campaign while openly supporting his conservative opponent Nicolas Sarkozy, said: "It may be our best-kept secret that the chemistry actually works."
As part of the festivities to mark the anniversary, Dr Merkel and Mr Hollande answered questions for over an hour yesteray evening from some 200 French and German students. Later on Tuesday they will attend a concert at the Berlin Philharmonic.
In a joint declaration, they said they would encourage unions, employers and workers in their countries to establish joint working groups to make proposals on competitiveness.
The leaders also touched on France's military intervention in Mali, with Mr Hollande thanking Dr Merkel for offering political and material support, including the use of two transport planes to fly West African troops to the capital Bamako.
"We know this is a difficult military mission that France is undertaking at the moment for all of us," Dr Merkel said.