When Schulz announced last month that he would not seek a new term as EU Parliament President to return to German politics, he was immediately pegged by German media as being a potential candidate for Chancellor for the Social Democrats (SPD) to run against Merkel.
And now a new poll shows that he may actually have a fighting chance, more so than the current SPD leader and Vice Chancellor, Sigmar Gabriel.
The poll released on Thursday by broadcaster ARD and research firm Infratest dimap asked more than 1,000 people who they would choose if hypotically they could directly elect the Chancellor. (In Germany, the Chancellor is chosen by the German parliament, not by direct vote).
When Merkel was pitted against Gabriel, she received 57 percent of the vote, while he received 19 percent. Another 19 percent said they would choose neither. This was an improvement of 12 percent for Merkel compared to the last poll, and a loss of 8 percentage points for Gabriel.
But when respondents had to choose between Merkel and Schulz, Merkel saw a comparative loss in support. The three-term conservative leader received 43 percent of the hypothetical vote, while Schulz took in 36 percent - a 7 percentage point difference.
Another poll, before Schulz's official announcement that he would head back to Berlin from Brussels, also showed that he would have more success than Gabriel.
That poll, by Stern magazine and Forsa Institute, showed that in a hypothetical direct vote against Merkel, Schulz would secure 27 percent of the votes compared to 49 percent for Merkel. But Gabriel would only take in 16 percent if he ran against the current Chancellor.
Whether Schulz will run rather than Gabriel is yet to be disclosed, and the party has said it will announce its decision in January.
Schulz could also reportedly be a potential replacement for Foreign Minister Frank-Walter Steinmeier, who is expected to leave his post next year as he has been nominated as the country's next president.
Merkel and party pull ahead in popularity
After Merkel was officially selected by her party this week to be candidate for Chancellor once again, Infratest dimap polling shows that she had a surge in approval, as 59 percent of respondents said it was "good" that she was running for a fourth term. This was a 13 percent increase over the last poll in September.
And when asked how they felt about Merkel's policies, 57 percent of respondents said they were happy or very happy, which was an increase of 5 percentage points compared to last month. Schulz also received 57 percent approval, jumping up by 7 percent.
Merkel's conservative Union of the CDU and CSU continued to hold its dominance among parties in a separate poll by Infratest dimap. They gained 3 percentage points over the last poll in November to reach 35 percent, while the SPD fell by one percentage point to 22 percent.
The upstate, far-right Alternative for Germany (AfD) that traditional parties have been wringing their hands about following a series of state election defeats, saw a slight gain of one percentage point over the last poll to reach 13 percent. The party has been on a slow downward trend of support in the Infratest dimap polls since it reached a peak of 16 percent in September.
And when asked about one of the AfD's leaders, Jörg Meuthen, 67 percent of respondents said they were somewhat or very unhappy with his policies.