Schroder said the EU has put Ukraine, a culturally divided country, in an "either/or" situation by urging on an association agreement with it.
According to the ex-chancellor, a "both/and" alternative would be more reasonable because Ukraine needs partnership with both sides.
He voiced support for his successor Angela Merkel and Foreign Minister Frank-Walter Steinmeier in efforts to further seek talks with Russia, noting sanctions would hurt Germany more than other countries.
Schroder, who is said to have a close relationship with Russian President Vladimir Putin, said he hasnt discussed with the president about the conflict in Ukraine.
Russia said Saturday it was willing to continue dialogue with the current Ukrainian authorities, while western countries were abuzz over forming alliance against Russia and threatening to resort to sanctions.
In Moscow, the Kremlin press service said Sunday Russian, British and German leaders have expressed their common interest in de-escalation of tensions in Ukraine despite existing dissent.
"(Russian President Vladimir) Putin, (British Prime Minister David) Cameron and (German Chancellor Angela) Merkel continued the discussion of an extremely complicated sociopolitical situation in Ukraine, as well as Crimeas referendum, set for March 16," it said.
"The parties expressed common interest in the earliest possible de-escalation of tensions and normalization of the situation," the Kremlin said.
The steps taken by the legitimate Crimean authorities were based on international law and aim to protect the legitimate interests of the population of Crimea, a Ukrainian autonomous republic that has become the epicenter of ongoing political crisis in that country, it quoted Putin as saying.
Putin said the current Ukrainian authorities were "doing nothing to curb the ultra-nationalist and radical forces outrages committed in Kiev and many other regions."
Meanwhile, the Kremlin admitted that differences existed among the leaders "in the assessment of whats going on" in that East European country.
"They agreed to continue their intensive working contacts, as well as contacts between their countries foreign-policy chiefs," it said.
The Crimean parliament has voted to join Russia as a federal body, and decided to hold the referendum over its future status on March 16, two weeks earlier than the former plan.