BERLIN –

Angela Merkel's path to a fourth term as Germany's chancellor just got more complicated.

The surprise decision by Social Democratic leader Sigmar Gabriel to surrender the SPD's candidacy to a more popular figure, former European Parliament President Martin Schulz, reinvigorates the fortunes of a party that has become the perennial also-ran to Merkel's Christian Democrats during her tenure.

"Schulz is someone who will compete with a more aggressive stance during the election campaign," said Henrik Enderlein, professor of political economy at the Hertie School of Governance in Berlin, in an interview Tuesday. "This of course makes the situation for Merkel more difficult, but also more interesting."

Merkel has already been staring down a wave of populist fury on her right flank, fueled by resistance to her open-border stance during the refugee crisis. Yet while the Alternative for Germany party has gained headlines and support, her traditional rivals — and coalition partners — in the SPD pose the more serious challenge. With Schulz at the helm, they might get enough support to form governing alliances that keep Merkel from power.

Schulz said in a statement that the SPD has the "courage" to unite a people "drifting apart" and that such divisions were laid bare by the U.S. election. "This country needs new leadership in these difficult times," he said.

A survey published in Bild am Sonntag this month showed that Merkel would win 46 percent of the vote, compared with 27 percent for Gabriel, if the chancellor were directly elected rather than chosen by the majority party. In a Merkel-Schulz match-up, her support would slip to 39 percent, just above Schulz's 38 percent, according to the poll.

"Now she's up against somebody who's actually very popular and who can properly challenge her in debates and strikes an emotional tone," said Carsten Nickel, a Brussels-based risk analyst at Teneo Intelligence, in an interview.

Long a fixture of the Brussels political machine, Schulz has been a member of the European Parliament since 1994 and served as its president from 2012 before departing last month to join the German political fray.

To German voters, the 61-year-old former bookseller and small-town mayor can present himself as a politician with top-level experience who is nonetheless unsullied by the grand coalitions of the SPD and Merkel's bloc that have twice governed since she came to power in 2005.

Gabriel, 57, will step down as party chairman after more than seven years, a tenure surpassed only by Willy Brandt in the post-World War II period. Gabriel, who is economy minister and vice chancellor, said he had become too associated with the Merkel-SPD grand coalition, according to party lawmaker Lothar Binding.

In the SPD shake-up, Schulz will take over the chairmanship of the party. Gabriel aims to succeed Frank-Walter Steinmeier as foreign minister. Steinmeier is poised to be elevated to the presidency, a mostly ceremonial post, next month. Brigitte Zypries, an SPD deputy economy minister who was justice minister from 2002 to 2009, will replace Gabriel as economy minister.

A more closely fought race in Germany's parliamentary elections, scheduled for Sept. 24, would crown an electoral calendar in Europe that already features a vote in the Netherlands and a three-way contest for the presidency in France, with Italy and Austria also threatening to call elections.

Still, the SPD under Schulz has a long way to climb. Merkel's Christian Democratic Union-led bloc tops all national polls, with an INSA survey Monday showing the party's support at 32.5 percent, well ahead of the Social Democrats at 21 percent. Other polls have the SPD hovering at around 20 percent. That makes another rerun of the two parties' coalition the most likely outcome.

Schulz's candidacy could translate into on-the-ground turnout for a party that has alienated its traditional base of workers and union members, particularly since the labor-market overhaul pushed through by former Social Democratic Chancellor Gerhard Schroeder over a decade ago.

"He brings the renewal SPD voters have been missing," Famke Krumbmueller, an analyst at Paris-based political risk consultancy OpenCitiz, wrote in response to a query on Schulz, adding that the SPD could climb toward 30 percent support. "Unlike Gabriel, he is not associated to the SPD-crushing grand coalitions.

After Gabriel announced his decision at a meeting of Social Democratic lawmakers in Berlin's Reichstag, deputies who left the meeting expressed a mix of shock and relief. Earlier this month, most officials within the party expected Gabriel would be the candidate.

"I'm very confident that we now have a very good chance to successfully run a campaign," SPD caucus chairman Thomas Oppermann told reporters. He planned to call a meeting on Wednesday to discuss the reshuffle before the party officially introduces its candidate on Jan. 29.

Any gain in the polls for the SPD would increase its coalition options, most notably for a three-way coalition with the environmental Greens party and the anti-capitalist Left party, according to Manfred Guellner, the director of Berlin-based pollster Forsa. Still, he said, a path to victory would be a long one. Another hypothetical possibility mentioned in Berlin circles would be a so-called traffic-light coalition comprising the SPD (red), the liberal Free Democrats (yellow) and the Greens.

"The SPD would have to rise considerably to get a majority for a government, and it remains to be seen whether Schulz can succeed at that," Guellner said in an interview. "It would have to be quite a gain."

While a Schulz candidacy would provide a boost, few offered a confident prediction that Merkel could be unseated.

"I don't see this is as the game changer that keeps her out of the chancellery," said Teneo's Nickel.