European Parliament head Schulz steps down and may challenge Merkel next year

President of the European Parliament Martin Schulz will step down at the beginning of next year and run in the German elections, with many suggesting that he will attempt to deny Angela Merkel a fourth successive term as chancellor.

Schulz has served in the legislative chamber of the EU for the last 22 years, but will return to German politics in 2017, potentially taking the top job at the Social Democratic Party, which will pose the biggest threat to Merkel's conservatives.

In his statement following the news that he would be stepping down, Schulz recognised that Germany had a very important role to play in the development of the European project.

"My commitment to the European project is unwavering. From now on I will be fighting for this project from the national level, but my values don't change," Schulz said.

Schulz's long-time friend and current leader of the SPD Sigmar Gabriel would have to yield in order for the former to run against Merkel.

He has been president of the European Parliament since 2012, with the bloc coming under increasing pressure during the last decade as euro-sceptic right wing groups gained a foothold throughout the continent.

Schulz has also been a member of the SPD for more than 40 years.