BERLIN (Reuters) - German Chancellor Angela Merkel's coalition partners on Monday accused her of running out of ideas and accelerating Europe's decline after the conservative leader announced she would stand for a fourth term in next year's parliamentary election.

The center-left Social Democrats (SPD), junior partner to Merkel's conservatives in their ruling "grand coalition", accused the chancellor of a "pretty feeble performance" in announcing her candidacy on Sunday evening.

By saying she will seek a fourth term, Merkel has effectively fired the starting gun on campaigning for the election in September next year, though she must govern with the SPD until then.

"I can't see how Angela Merkel wants to improve this country and prepare it for future challenges," SPD Secretary General Katarina Barley told reporters, adding that Merkel had run out of steam after nearly 12 years in office.

SPD chairman Sigmar Gabriel, who is also Economy Minister and Vice Chancellor, accused Merkel and Finance Minister Wolfgang Schaeuble of neglecting European integration.

"Twelve years of Merkel and Schaeuble haven't stopped the decline in Europe, but rather accelerated it," Gabriel told the RND network of regional newspapers in an interview to be published on Tuesday. The SPD has been in a "grand coalition" with Merkel's conservatives for nearly eight years.

Gabriel said the SPD would announce its nominee for chancellor at the end of January. Candidates under discussion include Gabriel and European Parliament President Martin Schulz.

He said the SPD would focus on substantive policy issues aimed at preventing a further breakup of Europe after Britain's vote in June to leave the European Union.

Gabriel has repeatedly called for increased public spending on schools, roads and digital infrastructure to lift overall growth in the euro zone's largest economy while Merkel's conservatives back lower taxes.

Sticking to his austerity policy, Schaeuble on Monday said the European Commission's call for Germany and other euro zone countries to loosen overall budget policy next year to create more growth and jobs was "the wrong path".

"I think Mrs Merkel has her merits, but she doesn't stand for the future anymore," said Manuela Schwesig who sits in Merkel's cabinet as minister of family affairs. The SPD politician was answering a question whether she experienced Merkel as being feeble in the cabinet, too.

Merkel, 62, said on Sunday that next year's election would be more difficult than any since reunification in 1990 due to the threat from the right, social divisions and the possibility that Germany's leftist parties could form a coalition.

An Emnid poll on Sunday put support for Merkel's conservative bloc down 1 point at 33 percent, 9 points ahead of her nearest rivals, the Social Democrats.

(Reporting by Holger Hansen and Michael Nienaber; Writing by Sabine Siebold; Editing by Alison Williams/Richard Balmforth)