The former German chancellor has come under fire from his successor for taking a top job with Russian oil giant Rosneft. The firm is a target of US and EU sanctions that were imposed after Russia's annexation of Crimea.
"I don't think what Schröder is doing is okay," she said Monday during an interview with the Bild newspaper that was broadcast live online.
The conservative Merkel joins a growing chorus of criticism of Schröder who, as head of the Social Democratic Party (SPD), was chancellor of Germany from 1998 until his election defeat by Merkel in 2005.
Merkel said she would not take a job in industry after her run as chancellor ends, but she emphasized that her current focus is on winning a fourth term as chancellor. Merkel and her Christian Democratic Union (CDU) currently have a comfortable 15-point lead over the SPD, with election scheduled for September 24.
"I don't intend to take any posts in industry once I am no longer chancellor, but I am first fully concentrated on the election and the fact that I would like to be chancellor again," the 63-year-old Merkel added.
Schroeder and Russia
The combative Schröder, 73, is no newcomer to Kremlin-based controversy. He has never hidden his friendship with Russian President Vladimir Putin, and was heavily criticized for giving Putin a hug at the Russian leader's birthday party in St. Petersburg in 2014, just weeks after the Kremlin annexed the Crimean peninsula.
Within weeks of being bounced out of the chancellery in 2005, he became the head of the shareholders' committee of Nord Stream, the pipeline company that transports natural gas from Russia to Germany under the Baltic Sea and is majority owned by Russia's Gazprom.
Now, just weeks before the general election, Schröder has again come under fire for accepting a $500,000-a-year (425,000-euro) board job with Russia's Rosneft, which is subject to western sanctions over Moscow's role in the Ukraine conflict.
Last week Schröder insisted his new job would not hurt the SPD's election chances, and accused his political enemies of maneuvering to get Merkel re-elected.
Martin Schulz, the SPD leader trying to topple Merkel in next month's election, has told Schröder of his concerns but also called it "a private matter" for the former chancellor.
Schröder is still ridiculed for saying, back in 2005, that he agreed with a description of Putin as a "flawless democrat."