"I once asked the chancellor, what would be more costly for Germany: for France to be allowed to have half a percentage point more deficit, or for Marine Le Pen to become president?" Gabriel said in an interview published on Saturday in Der Spiegel magazine, adding, "Until today, she still owes me an answer."
Gabriel, the head of Germany's Social Democrats Party (SPD) and a partner to Merkel's conservatives in her ruling grand coalition, said Germany's insistence on austerity in the euro zone has left Europe more divided than ever, putting the 28-member bloc at the risk of a real break-up.
"But I also know about the state of the EU. It is no longer unthinkable that it breaks apart," he said, adding that Berlin's pressure on countries such as France and Italy to tighten their fiscal discipline has led to more political risks, such as the rise of far-right, nationalist political parties.
The SPD has repeatedly challenged Merkel's emphasis on fiscal discipline as a foundation for economic prosperity, saying greater focus on investment could be the EU's path to success.
Gabriel said Germany would badly lose if the EU crumbles over economic problems and also divisions over how the bloc should handle an unprecedented exodus of refugees from the Middle East and Africa.
"Should that happen, our children and grandchildren would curse us," he said, adding, "Germany is the biggest beneficiary of the European community, economically and politically."
Sources in the SPD said on January 5 that Gabriel, who is also Germany's economy minister, could contest Merkel in September's federal election if members extend the mandate of the party's long-standing president.