"A dangerous trend is emerging, a new politics of polarization. Some play on people's fears. They accuse immigrants of violating European values. Yet too often it is the accusers who subvert these values," Ban said on Tuesday.
He added that today the primary targets of stereotyping, which closes minds and breeds hatred, were immigrants of the Muslim faith and that Europe could not afford this.
German Chancellor Angela Merkel had said on Saturday that Germany's attempt at multiculturalism had totally failed, asking immigrants to learn the German language and assimilate into society.
Merkel added that the concept that "we are now living side by side and are happy about it," does not work.
A poll conducted by Friedrich Ebert Foundation think tank last week shows that over 58% of Germans want religious practice for Muslims to be seriously limited in the country.
In his speech, Ban asked the European Union to demonstrate leadership not just with regard to immigration but also in tackling extreme poverty and other global challenges.
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