The leader of Germany's Social Democrats (SPD) took aim at the Republic and criticised USA technology firms Apple, Facebook and Google on Thursday, saying a strong Europe was needed to make sure they stick to the rules.
The Social Democrats' leadership insisted the party would go into opposition after a disastrous election result in September.
His U-turn - which he was pushed into by his own MPs - has earned Schulz much ridicule both nationally and within the SPD and led to charges that he is unfit to continue to lead Germany's oldest political party.
"Europe is our life insurance", said Schulz.
Whatever the outcome of any eventual talks with Merkel, it will have to satisfy the SPD party base, because members will ultimately vote to approve or scrap any coalition agreement.
However, President Frank-Walter Steinmeier made clear that he doesn't want a new election, and Social Democrat leader Martin Schulz reversed course.
However, some members - including the party's youth wing - want to specifically rule out another coalition, leaving only a minority government or a new election as options.
The Greek prime minister, Alexis Tsipras, has also sent Schulz supportive text messages; in one he pleaded with him to "not stand on the sidelines during this decisive phase for Europe".
The SPD will spend much of the next three days wrangling over the issue.
Ten weeks after inconclusive elections left German politics in a stalemate, Martin Schulz urged his divided centre-left SPD to vote in favour of launching open-ended talks that could lead them to join Merkel in another "grand coalition" or tolerate a minority government.
Chancellor Angela Merkel's conservatives are hoping to form a coalition with the SPD after failing to get a three-way coalition with the liberal Free Democrats and Greens off the ground.