Martin Schulz speaks during a press conference at the headquarters of SPD in Berlin, on December 15, 2017.
Schulz said the SPD had a responsibility to consider backing the government to contribute to Germany's stability.
Germany's Social Democratic Party (SPD) on Friday announced that it would start exploratory talks with the Conservatives Union for another grand coalition government. A party congress to decide what happens next - approving the possible opening of formal coalition talks, for example - has been penciled in for January 14 but could be delayed, he said.
Merkel, speaking later Friday at a congress in Nuremberg of her Bavarian conservative allies, the Christian Social Union, voiced "great respect" for the Social Democrats' decision.
Merkel, who was still trying to convince Germany's Social Democrats to form a "grand coalition" government after elections in September, spoke optimistically about reaching an agreement on the eurozone.
Schulz said he would meet Merkel and other CDU and SPD leaders before Christmas to discuss the form the talks would take.
SPD leaders hope to sell the about-face to skittish members by forcing Merkel's conservative to concede a raft of popular worker-friendly measures in exchange for their support for a coalition or minority government. She urged quick action on forming a stable government, 11 weeks after the vote.
Many SPD members are nervous at the prospect of a renewed "grand coalition" after their previous one with Merkel proved so costly.
"Forming governments in a reasonable time is a German trademark, and we shouldn't risk that trademark", said Merkel's conservative close ally Peter Altmaier, warning that the far-right Alternative for Germany party would profit if the uncertainty dragged on.
The CSU, which is at the front of Germany's southern borders, is against refugees' family reunion, and the Union had already agreed on a cap of immigrants of 200,000 every year.