They will do anything to not be perceived as antisemitic

The German government is deathly afraid of anything that could be constructed as anti-semitic. Probably also bought, but that's just a guess. Pathetic, and I say that as a German.

If Netanyahu turns up in Germany (and right now, he isn't here, theres videos showing him in Tel Aviv while the jet was already landing in Berlin), but if he turns up, this might trigger a constitutional crisis. Chancellor Merz has assured him he would not be arrested, but by law he has to be and the Chancellor has control of the executive, not the judicative. Multiple citizens organizations have already called for legal measures against the Chancellor, should he try and interfere with an arrest.

In short: Merz has the power to stop the arrest, but it would be illegal and lead to interesting consequences.

He does indeed, and the public prosecutors have been notified, but alas- nothing happens (surprise)