With her authority badly weakened by last September's inconclusive general election and ongoing squabbles in her unhappy coalition, the chancellor has faced mounting calls to prepare Germany for the post-Merkel era.
She said the SPD would now propose a "discussion paper" in Berlin demanding concrete progress on key issues over the next year, including pension rights and better childcare, before deciding whether to remain in the coalition.
"The message to the parties ruling in Berlin is: People want fewer disputes and more focus on the important issues", he said.
SPD chief Andrea Nahles said on Monday her centre-left party, Germany's oldest, had failed "to break free from the government" and stand out in its right. The SPD's Nahles has hastened to claim that "the state of the government is unacceptable".
The Greens' strong performance in Hesse means Bouffier will likely be able to remain state premier at the helm of a CDU/Greens government.
Merkel has dragged the CDU to the political centre in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011.
The move is not unprecedented in German politics. Meanwhile, the anti-establishment Alternative for Germany party, which advocates a stricter migration policy, has entered Hesse's Landtag for the first time with 13.1% of the vote and now holds seats in all of Germany's regional parliaments.
All this sangfroid is no stoical front in the face of defeat; it is the demeanour of a chancellor who knows that she has a few aces left up her sleeve.
Merkel's ruling coalition "has lost the confidence of the electorate", said Josef Joffe, publisher-editor of weekly Die Zeit.
Merkel's fourth and probably final government has already come close to collapsing twice.
Of the SPD, he added: "A party on the way down can not suddenly rise from the ashes by going into the opposition".
And Mr. Bouffier, noting that his party fared better in the Hesse vote than it now does in polls nationally, seems keen to stay in power.
Several conservative party sources said that Friedrich Merz, a former parliamentary leader of Merkel's conservative alliance, was ready to put himself forward for the CDU chairmanship at the party's congress in December. She is set to make the announcement official at a press conference at 1pm local time today (29 October). However, the CDU's share of the vote fell by more than 11 points, to 27% - marking the worst result for the party since 1962.
Over the last two weeks, voters in the states of Hesse and Bavaria also punished her party and coalition allies CSU and SPD in two separate regional elections.