Martens, who died on October 9 aged 77, headed nine Belgian governments between 1979 and 1992 and led the European People's Party conservative group (EPP), the largest in the European Parliament, for more than a quarter of a century.
European Union president Herman Van Rompuy and EU Commission President Jose Manual Barroso were among those who joined Belgium's King Philippe to pay their last respects in Saint-Bavo cathedral in the Flemish region of Ghent.
Barroso paid respects to a "man of consensus" who had a "profound impact" on his country and Europe, while Van Rompuy, also a former Belgian premier, said Martens's "dream of harmony, fairness and cohesion is also our own today."
Merkel praised the "inspiration" and "strength" of her "political friend," and Belgium's current Prime Minister Elio Di Rupo said Martens was an example to others.
A Flemish-speaker whose parents were farmers, Martens was born the eldest of a family of seven on April 19, 1936, and went on to study law, philosophy and theology.