Hungary's President, Laszlo Solyom, meanwhile unveiled a white marble monument in memory of those who had risked their life to cross the Iron Curtain.
Organisers of the "picnic" like Laszlo Nagy had wanted to highlight the division between East and West. They said they had not planned the outcome, but that it had exceeded their expectations.
"The Soviet bloc was like an air balloon with over-pressure so it needed only a prick of the needle and we were holding this needle," Mr Nagy explained.
"Honestly to say, if we wouldn't have organised this Pan-European Picnic, something would have happened two weeks later, three weeks later, because the politicians needed a trigger."
'Doors to freedom'
The BBC's Oana Lungescu, at the Hungarian border town of Sopron, says the system had already begun to crumble. Poland had just elected the first non-communist prime minister in 40 years.
Eastern Germans cross the Hungarian border in 1989
Hungary's reformist Prime Minister Miklos Nemeth had started dismantling the security fence along its border with Austria, partly because it cost too much.
In September, Mr Nemeth fully opened the borders, allowing some 60,000 East German refugees to leave for the West.
None of this would have been possible without the tacit approval of Soviet leader Mikhail Gorbachev, our correspondent says.
One of those who fled into Austria was Robert Breitner. Speaking in Sopron, he said the event had changed his life.
This marble "Breakthrough" monument was unveiled by Hungary's president
"This land brought me freedom. In a symbolic sense this country opened the doors to freedom, to life decisions. And for that I will be grateful to the Hungarians for the rest of my life."
Swedish Foreign Minister Carl Bildt, who was in Sopron with Mrs Merkel on behalf of the EU, recalled the watchtowers and the barbed wire he had once seen crossing the border there, our correspondent says.
But he also urged today's Europe, weary of further expansion, to continue welcoming new members, just as it admitted the countries of the former communist bloc, she adds.
"We must remain an open Europe of open societies and open minds, open to others beyond our present boundaries," Mr Bildt said.
This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.