The Social Democratic Party (SPD) leader said Merkel had tried to dictate terms for their sole televised debate next week, and accused her of abusing the perks of office by flying to campaign events “at a bargain price”.
“There are many issues where people have the feeling that Merkel is out of touch,” Schulz said in an interview on public broadcaster ARD.
The broadside comes as the former European Parliament chief is racing to narrow his party's gap in the polls with Merkel's conservatives.
The latest Deutschlandtrend survey for ARD put support for Merkel's CDU/CSU at 38 percent, followed by the SPD at 22 percent.
But Schulz insisted he could still win the race by focussing on those who have yet to make up their minds, after a study last week showed 46 percent of voters are still undecided.
“I want to reach those undecided people,” said Schulz. “And if I can do that, then I can win the parliamentary elections.”
He homed in on a report in news magazine Der Spiegel at the weekend which claimed that Merkel was using police and army helicopters on the campaign trail but that her party was only paying a fraction of market rates.
“She is using the infrastructure of the state to fly to her campaign events at a bargain price,” Schulz said.
He also accused Merkel of shying away from a real debate after she reportedly rejected a television network's proposals to change up the format to allow for more spontaneity when the pair face off next Sunday.
“More and more people are seeing this as a kind of aloofness that is already playing a big role in this campaign and will mobilize my voters,” said Schulz.
Asked to comment on the criticism in her own interview on ZDF television, Merkel replied that she has always tried “to do justice” to her office.
“And that means serving the people of Germany,” she said.
“I look forward to next week's debate,” she added.
No grand coalition
With neither of the two main parties on track for an overall majority in the September 24th vote, Schulz reiterated his stance that the SPD isn't interested in another stint as the junior partner in a Merkel-led government.
“I don't want to continue the grand coalition,” he said.
“If she wants to come in under my leadership with the CDU as junior partner, then we can see. But I don't think they want to continue the grand coalition either.”
Four smaller parties are also expected to clear the five-percent threshold to enter parliament this year, more than ever before.
The Greens, the pro-business FDP, the far-left Die Linke and the rightwing populists AfD are all polling at between eight and 10 percent.