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Merkel gets another headache as socialist rivals jostle for position ahead of elections

Angela Merkel has confirmed she is running for a fourth term as German chancellor, but a reshuffle in the rival socialist party could prove to be a major hurdle in her path to regaining power.

Martin Schulz, currently president of the European Parliament and member of the Social Democratic Party of Germany (SPD), has announced this week that he is returning to domestic politics. Though he is expected to take on the foreign minister role first, media reports suggest that his ultimate goal is vying for power with Merkel.

"Schulz, if supported by his party, could stand for a clear pro-European platform in the elections and would force Merkel to put her cards on the table," Carsten Brzeski, chief economist at ING Germany, told CNBC via email.

He added that "Schulz's rhetorics are clearly better than Merkel's. So, at first glance, this would be bad news for Merkel but good news for Germany."

Schulz's experience in European politics could force Merkel to be more specific about her strategy to deal with the euro zone economy, more integration within the EU, the refugee crisis and the exit negotiations with Britain.

Alain Jocard | AFP | Getty Images

Ralf Stegner, deputy leader of the SPD, told CNBC on Friday that his colleague was a "really good European politician." Stegner confirmed the SPD had not yet decided who will be its candidate for the upcoming 2017 federal election, but that it will do so "soon."

Schulz is expected to replace the current German foreign minister, also from the SPD, Frank Walter Steinmeier, as the latter eyes the German presidency. With a strong position in the German cabinet and without a clear rival within his party, Schulz could fill the SPD's spot on the paper ballot. However, some speculation suggests that Schulz would have to go up against SPD Chairman Sigmar Gabriel, who is also economy minister and vice chancellor.

Stegner told CNBC that Schulz is "one of the best" people that the party has to attract young voters and speak out against populism.

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