At a special congress to decide his party's campaign programme for September 24 elections, Schulz accused Merkel and her conservative CDU party of "systematically refusing debate on the future of the country".
Merkel's tactic, he said, is to hold off on airing her views rather than engage, thereby making the people lose interest in politics.
While the Social Democratic Party (SPD) takes position on issues, "the other side is silent," said Schulz.
"That's what one calls in circles in Berlin asymmetric demobilisation. I call it an attack against democracy," charged Schulz, whose party is a junior partner of Merkel's grand right-left coalition.
In his speech, Schulz emphasised his party's push for "social justice", with higher taxes for big earners and free schooling for all.
But he also laid down gay marriage as a condition for any future coalition involving the SPD.
"I will sign no coalition deal in which marriage for all is not inscribed," he said.
The SPD's call for gay marriage comes just a week after the Greens set a similar condition, while Merkel's CDU has so far refused to allow same gender couples to wed.
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