Earlier in the day, Merkel also defended her refugee policy during her annual summer news conference.
At a wide-ranging news conference a day after she discussed the continuing influx of migrants from Africa with other European leaders, Merkel tackled head-on an issue that once looked likely to be a liability in Germany's September 24 election but so far has failed to hurt her.
Schulz, whose Social Democrats (SPD) trail Merkel's conservative Christian Democrats by 15 percentage points, first told ARD TV that Merkel's behavior at the end of her third term reminded him of the way former Chancellor Helmut Kohl had lost touch with voters during his fourth term in the late 1990s.
She added, though, that this does not mean a political transformation in Syria is not needed.
Asked about the European Commission's plan announced in May not to continue the controls beyond November, Merkel said she would call for their extension during talks with its chief Jean-Claude Juncker on Wednesday.
"As you said, that will be good for the Russian economy and for the German economy", she told reporters.
Nationwide, the AfD is now polling between 8 and 10 percent of the vote - down significantly on its 2016 record high of 15 percent but enough to clear the 5 percent hurdle required to enter parliament. More than one million people have arrived in the country since the start of 2015, but Merkel has no regrets over the decision to let them in. Many migrants and refugees have fled poverty and fighting in their home countries, many coming from the Middle East, Africa and Asia.
"It will take time and patience but we will succeed". The chancellor has already indicated she would not form a coalition with AfD but might take in the Free Democrats.
Merkel, who wants to proof the currency union against future crises, said she did not rule out a French idea to have a common euro zone finance minister.
"This is a very complicated phase of our relationship" with Turkey, Merkel said.
"Europe itself still hasn't done its homework to this day", she said, adding that the continent can not be selective in showing solidarity.
But the 63-year-old has lashed out at critics, admitting she would react "the same way again" if a similar crisis erupted.
"Our demand is very clear: That the people who have been arrested there are released", she said.