The socialist parties of France, Spain and Portugal met in Lisbon on Friday saying they wanted to work together to create jobs and promote growth.
The meeting of the three parties comes alongside the release of a French Socialist Party document on Europe which describes Merkel's insistence on austerity as “selfish.”
In the paper, due to be presented at a party congress in June, the Socialist Party accuses Merkel of being obsessed with "Berlin's trade balance and her electoral future."
The European project "is being damaged by an alliance between the Thatcherist tendencies of the current British prime minister... and the selfish intransigence of Chancellor Merkel," the document said.
"Democratically challenging the European right involves politically confronting the German right," it went on.
In the run-up to federal elections in September, Angela Merkel will be keen to promote the image of a politically united Europe tackling the debt crisis. But the meeting in Lisbon reinforced the point that Europe is divided into two ideologically opposed camps.
Alfredo Pérez Rubalcaba, general secretary of the Spanish Socialist Workers' party, asked “How much suffering is still to come before we notice that these policies are wrong?”
In France, Socialist Party stalwarts have recently urged Hollande to challenge Merkel's austerity policies more aggressively.