Merkel's expressed skepticism about the latter two possibilities, and following an appeal from President Frank-Walter Steinmeier, Schulz agreed to meet with the chancellor and CSU leader Horst Seehofer on Thursday night to talk about the various possibilities.
The chairman said the SPD's executive committee would discuss various options on Monday, and make a proposal which would be discussed at SPD's party conference from December 7 to 9 in Berlin.
"I can clearly deny the report about me having given the green light for grand coalition talks".
Merkel is casting around for a coalition partner after her centre-right bloc shed support to the far right in the 24 September election.
"We have several options for forming a government", he said, according to AFP. "This is simply wrong", Schulz said, adding that the report appeared to be based on sources within Merkel's conservative CDU/CSU bloc.
GettyMrs Merkel has been accused of trying to lead the whole of Europe from Germany
Ahead of that congress, which will also decide whether to re-elect Schulz as chief of the SPD, the party's top brass has been careful to tread softly regarding its options. Merkel has said in the past she does not want to lead a minority government.
"It's now up to the SPD to provide clarity", said CDU manager Klaus Schueler.
"Another senior member of Merkel's Christian Democrat Union (CDU), Mike Mohring, said he was hopeful for an eventual grand coalition and expected a new government to be formed by March". French President Emmanuel Macron has offered some important ideas: a European finance minister; Eurobonds to finance a new European investment program; more emphasis on innovation; a financial transactions tax to fund increased aid to Africa, where Europe has a strategic interest in long-term development; and tax harmonization more generally, before the US triggers a global race to the bottom on taxing corporations and the rich.
A rebellion is already brewing over entering into a new grand coalition, known as "GroKo" in German.
"A positive response to Emmanuel Macron will be a key demand in any negotiation with the SPD".More news: Meghan Markle has met Prince George and Princess Charlotte at Kensington Palace