BERLIN — Martin Schulz had a distinctly unpleasant task Monday in Berlin: Explaining to his fellow Social Democrats how the party could have lost a regional election so resoundingly in its traditional heartland.

“Sometimes, a boxer takes a punch,” Schulz told a crowd at SPD headquarters, “but this doesn’t mean that his opponent will win the next round.”

The problem for Schulz is this was the third of three regional rounds — all of which the SPD has lost — and it's not looking good for the national ballot in the fall.

So expect some soul-searching in the weeks ahead.

On Monday, Schulz said the SPD will soon elaborate on its campaign program, sketching out proposals on how to boost investment in Germany. He also said the party would outline plans for how to improve domestic security — a traditionally strong subject for Chancellor Angela Merkel’s Christian Democrats (CDU) and one that has helped the CDU win state elections this year.

In North Rhine-Westphalia, Germany's most populous state, the CDU won Sunday after campaigning heavily on the security issue and accusing the SPD-led state government of not being effective in combating crime and terrorism.

The SPD, however, won't take the security challenge lying down, Schulz suggested Monday, as he brought up news about a German soldier who is suspected of having planned a terrorist attack under the guise of a refugee.

"I can only take notice that a right-wing extremist German army officer succeeds in registering as a Syrian asylum seeker with authorities [overseen by] the federal government," Schulz said, adding that the authorities in question are all overseen by CDU-led ministries.

Merkel effect trumps Schulz effect

The SPD enjoyed a surge in the polls when it announced that Schulz would be its candidate against Merkel, giving rise to the idea of a "Schulz effect," but it appears to have failed to capitalize on that enthusiasm, losing three state elections in a row.

It puts Merkel in an advantageous position heading into the final campaign sprint before September's vote.

“The time of ... state elections is over,” Merkel said Monday afternoon in a speech at CDU headquarters, appearing visibly energized. “Now, a new phase begins.”

Referring to the awkward fact that the CDU and SPD are partners in the coalition government over which she presides, the longtime chancellor said she's aware "that this new phase also demands completely new efforts.”

Her conservatives are ahead in the national polls at 37 percent — a comfortable 10 percentage point lead over the SPD.

Part of the problem for the SPD is that as the center-left party and the CDU have moved further toward the political center over the past two decades, German voters find it increasingly difficult to distinguish between them, making the election more of a personality contest between the two leaders.

This dynamic was highlighted by a survey of voters in North Rhine-Westphalia: 59 percent of those who voted for the CDU said Merkel had been the most important reason for their vote; compared to 29 percent of those who voted for the SPD who said that Schulz had been the decisive factor.

The SPD's dilemma

The SPD clearly needs to do more to distinguish itself from the CDU and Schulz offered glimpses of the strategy to do that on Monday.

Besides pushing the SPD's traditional core values — such as advocating for social justice and promoting disarmament — he focused on security but also said one core element of his campaign will be promoting investment and educational efforts in Germany.

"The asset of our resource-poor country is people," he said.

But that may be an uphill battle. In addition to security, business and investment are also areas traditionally owned by the conservatives. And Merkel isn't handing them over to the Social Democrats without a fight.

Three hours after Schulz spoke at the Berlin headquarters of the SPD, the chancellor spoke to journalists at the CDU headquarters.

Her central topic? How her party will promote investment and research to help create "the jobs of the future."