The Social Democrats are being urged to reform their partnership with the German Chancellor’s CDU party after talks over a three-way coalition collapsed.
And Mr Schulz said a more powerful EU would be a key aim if a deal was agreed, echoing French President Emmanuel Macron’s proposed reforms.
He said the party would demand “utmost importance” to the issue, the Financial Times reported.
Mr Schulz told reporters: “All of Europe is looking at Berlin at the moment.
“The question of whether we need a eurozone budget and if so how it will be financed.
“The question of whether we need a European finance minister who can tackle tax dumping inside the member states of the currency union.
“These things need an answer.”Mrs Merkel, a central voice in the EU, has largely neglected the bloc since her election debacle as she desperately tried to form a coalition with the pro-business FDP and Green parties.
The FDP were staunchly opposed to Mr Macron’s vision for an ever-closer Europe with its own budget and finance minister.
In a bid to avoid fresh election, Mrs Merkel is now turning her attentions to Mr Schulz in the hope their coalition can be resurrected.
Preliminary talks are due to take place on Thursday in another extension to Mrs Merkel’s troubled bid to form a government.
The CDU had ruled out any repeat of the arrangement following its own disaster at the September 24 polls.
But the party has been persuaded back to the negotiating table in a bid to fill Germany’s leadership vacuum.
Yesterday, Mrs Merkel attempted to heap pressure on her prospective partners, saying the EU and wider world needed a stable Germany.
She said: “There are European elections in 2019 so there is a big expectation that we take positions.”
Mrs Merkel also cited conflicts in the Middle East, tensions with Russia and relations with the US as factors that required a Germany “capable of acting”.
And David McAllister, an executive committee member of the CDU, said the country needed to iron out its stance on key EU issues ahead of European Parliament elections in 2019.
He said: “Diligence definitely comes before speed in forming a coalition.
“But the government should be formed in time for Germany to be capable of acting if decisions need to be made in Europe in 2018.”