FILE PHOTO: German Economy Minister Sigmar Gabriel and Chancellor Angela Merkel reacting as they attend a cabinet meeting at the Chancellery in Berlin, Germany, January 11, 2017. REUTERS/Fabrizio Bensch/Files

BERLIN (Reuters) - The leader of Germany’s centre-left Social Democrats on Tuesday criticized the austerity policies of Chancellor Angela Merkel and Finance Minister Wolfgang Schauble, saying they had contributed to the rise of populist parties on the continent.

Sigmar Gabriel, who is vice chancellor, unleashed his criticism in a statement in which he also confirmed that he would not run against Merkel in a federal election in September and cautioned his party against a right-left grand coalition.

“The policies of Angela Merkel and Wolfgang Schaeuble have no doubt contributed to the deep crises in the European Union since 2008, to the isolation of a dominant German government and, through a relentless insistence on austerity, to high unemployment outside Germany,” Gabriel said in a statement.

He added: “One consequence has been the strengthening of anti-European populist parties and the damaging of not only democracy but also a good investment climate.”

He said the Social Democrats, who are in a coalition with Merkel’s conservatives, had failed to get Merkel to change course.

“The continuation of the current policies comes at the cost of sustainable growth,” Gabriel said. “This is also dangerous for Germany.”