Martin Schulz | Sean Gallup/Getty Images In campaign debut, Martin Schulz leans left Organized labor leader says SPD’s new man is moving in the right direction.

BIELEFELD, Germany — Martin Schulz wants to undo labor market reforms that are credited with fixing the German economy in a bid to make peace with the trade unions.

Appearing at one of his first campaign rallies since getting the Social Democratic nod for chancellor, Schulz promised to fix the broken relationship with the labor movement and the left wing of the SPD. "It remains true that we can make this country better only together with the unions," Schulz told supporters in the northwestern town of Bielefeld on Monday.

His proposal to scrap some of the labor market reforms introduced over a decade ago under the the last center-left chancellor, Gerhard Schröder, offers a first taste of what the former president of the European Parliament — who only moved into national politics this year after a couple decades in Brussels — will run on this autumn. His decision to tack left toward the SPD's old industrial working class base is bold and risky.

The so-called Agenda 2010, which included cuts to pensions and to unemployment benefits, is widely seen as having propelled Germany's recovery in the past decade. By retiring its reputation as "the sick man of Europe," Germany became the undisputed economic leader of Europe, lecturing less austerity-driven countries such as Greece and Italy.

The incumbent, Chancellor Angela Merkel, told a closed door meeting of her party earlier this month that the ruling Christian Democrats had to propose a "better program" than Schulz, without offering many details. She is expected to build her fourth election campaign around the need to preserve Germany's economic strength. Schulz's intervention on Monday offers a potentially sharp contrast to voters, at least on economic policy, in the coming campaign.

"We have made mistakes. There’s nothing wrong with correcting mistakes" — Martin Schulz

With Schulz fronting their ticket, the SPD has seen a remarkable reversal in fortunes. Three weeks after his nomination as candidate for chancellor in this fall's election, the SPD has surged in popularity and some polls even put it ahead of Merkel's Christian Democrats.

The success may have come as a surprise to many, Schulz included, but he's hoping to keep the momentum going. That means winning over voters who turned their backs on the party because they believed it had moved away from its working-class roots.

"We have made mistakes. There’s nothing wrong with correcting mistakes," he said in Bielefeld.

Since the Schröder government overhauled Germany’s social security system some 12 years ago, the party's left and the trade unions have complained about feeling alienated. This contributed to a decline in the fortunes of the SPD, reducing it to a support role to the CDU as the (very, in many people's eyes) junior partner in the "grand coalition" government.

But Schulz could be the man to turn things around, according to Reiner Hoffmann, chairman of the German Confederation of Trade Unions (DGB).

"Martin Schulz addressed very clearly central trade union topics that are important to us in the Bundestag elections," Hoffmann told POLITICO, adding that he was impressed by the level of detail in Schulz's Monday speech.

"Martin Schulz today pointed out a flaw in ... Agenda 2010. Re-adjustments and corrections have to be made,“ Hoffmann said, adding that a minimum wage and the right to retire at the age of 63, after 45 years of work — measures introduced by the grand coalition of the CDU, its Bavarian sister party the CSU and the SPD — were a good start, but more more was needed.

Schulz's new proposals include restrictions on temporary job contracts, higher pensions and a one-off "free-time budget" that every employee would get at the beginning of their career to use as they see fit, whether for extra training or to take care of elderly relatives.

"I'm happy to see the headlines today, to see that Martin Schulz wants to revise the Agenda 2010," said Klaus Barthel, an SPD member of the Bundestag and head of the left-leaning workers' platform AfA, in reference to a short preview that Schulz had given to Bild newspaper.

Music to union ears

It's been a long journey to get to this point for Hoffman. He said former SPD leader Sigmar Gabriel "made a first step (toward reconciliation with the left) when he pointed out at the Dresden party congress in 2009 that trade unions and Social Democrats can never be as far apart as they were at the time of the Agenda 2010."

But before the elections in 2013, the SPD picked Peer Steinbrück as its candidate for chancellor; the former finance minister under Merkel had a style in politics and in life that didn't quite fit with the working-class rhetoric the unions were looking for.

Schulz made it clear he would stand up for the ordinary citizen, but dismissed suggestions from Finance Minister Wolfgang Schäuble of the CDU that he was taking a leaf out of U.S. President Donald Trump's playbook.

People want regular jobs, Schulz said, while globalization and digitalization have made such jobs more difficult to find. With inequality rising, people feel left behind.

That's all music to the ears of the DGB’s Hoffmann.

"People do not want a nationalist, protectionist policy like in the U.S.," Hoffman said. "We have to become bolder, we must not make the mistake of the working-class movement in the 1930s, we must not be narrow-minded and discouraged by protectionism and nationalism. We must get up and face it. That's what Martin Schulz stands for."

"I’ve understood Martin Schulz’s speech as an offer to trade unions," he added.

But Schulz hasn't repaired all the damage done to the SPD's relationship with the trade unions and Hoffmann said the DGB would "talk with all parties before the elections but particularly during the coalition negotiations."

However, in the German political system a non-coalition government is unheard of and many of Schulz’s pledges — including scrapping reforms widely seen as having helped secure economic growth — could be a turn-off for some potential coalition partners.