The report, entitled "Learning from Mistakes," is 105 pages long, covering everything from the timing of Martin Schulz's nomination as chancellor candidate to organizational deficiencies within the party headquarters itself.

Barely a fifth of voters cast their ballots for the SPD last September, a humiliating result for Germany's oldest political party, which still fancies itself the main rival to Chancellor Angela Merkel's conservatives. Not surprisingly, the report – commissioned by the party and written by a team of veteran journalists – doesn't make for happy reading.

After an initial euphoria that saw him briefly top Merkel in opinion polls in early 2017, Schulz's popularity plummeted. That was in part because of his campaign strategy. 

"In terms of policy, Schulz was supposed to remain fuzzy until summer so as not to present opponents and the media with points of attack and in order to give him time to plug his own policy gaps," the report reads.  "He was to avoid controversial topics like pensions and taxes until just before the party summer conference, when the platform was agreed."

Schulz and the SPD also made the mistake of indicating a willingness to partner with the controversial Left Party, successor to the socialist party in Communist East Germany, in a regional election in the western state of Saarland in March 2017. Voters there decisively rejected that option, setting in motion a continuous slide ending with national defeat on September 24.

'No strategic basis'

It's easy to blame Schulz's failings as a lead candidate for that debacle, but the report identifies longer-term reasons for the SPD's decline – the party also lost the previous two national German elections to Merkel by wide margins.

The Social Democrats, the reports authors conclude, have been caught between traditional left-wing issues like increasing social equity and their centrist willingness to work together with Merkel's conservatives in government. The party has consistently failed to develop and nurture its central issues in the long haul.

Read more: Opinion: Is this the end of Germany's SPD?

"The 2017 election wasn't lost in 2017, but rather in 2015," the report asserts. "The six weeks before election day, which are accompanied by posters, commercials and other advertising, is the end of the campaign and not the beginning. No advertising in the world can rescue in these final six weeks a campaign that has been stumbling toward the end. The 2017 campaign had no strategic basis. It had no compass. Decisions were made on the spur of the moment."

That was one of the main lessons to be learned from Schulz's defeat, said SPD General Secretary Lars Klingbeil when presenting the report in Berlin on Monday.

"We want to get away from the short-term changes of strategy we've had far too many of in recent years – that was the wrong path," Klingbeil said. "Instead we want to pursue our principles in the long term and not be pushed off course."

A blown chance at the chancellorship?

Schulz made social equity the cornerstone of his campaign but failed to convince voters that it was anything more than an abstract slogan. Nonetheless, the report holds out hope that, at least in terms of policy, the SPD was actually on the right track. The report even says that Schulz had a chance to topple Merkel, whose conservatives also dramatically lost support even as they took the most votes.

"In the early phase Martin Schulz was able to address and invigorate a dormant SPD potential in society," the authors wrote. "The SPD could have achieved something in the election – perhaps under the right circumstances even the chancellorship."

Read more: Is a comeback in the cards for German Social Democrat Martin Schulz?

It's that potential the SPD aims to revive by advocating its core cause more steadfastly and specifically.

"The issue of distribution of wealth and social equity is the most central one for the SPD, but it needs to worked through and transformed into intelligent and well thought-out ideas," Klingbeil said. "It has to be made truly concrete."

One unanswered question, however, is how the SPD can offer concrete proposals that would redistribute wealth in Germany while continuing to function as a partner with Merkel's conservatives in a centrist government. It is not for nothing that participation in so-called grand coalitions has been perceived as a main party Achilles heel. And it's not the only one Social Democrats must overcome.

Lack of appeal to young voters

Perhaps the SPD's biggest challenge is demographic and generational. The Social Democrats, like Merkel's conservatives, are running the risk of becoming a party of old people.

"The most glaring weaknesses are with people in the middle of life, university-educated and employed people between the ages of 30 and 44," the report found.  "Both the party and the candidate lacked forward-oriented expertise and a modern aura. One indicator of modernity and social vision is success among young voters, but the party hasn't had any for more than ten years."

Klingbeil says that the SPD is taking steps to address its youth problem. One step, he says, is that the popular leader of the SPD youth wing, Kevin Kühnert, who led an unsuccessful but widely respected campaign against the latest grand coalition, will be given a major say in the party's new direction.

It is unclear whether that and the other changes Social Democrats hope to enact will be enough. New party chairwoman Andrea Nahles is part of the old guard, remains unpopular with much of the rank-and-file and must show that she can inspire a turnaround.

The SPD has slipped all the way down to sixteen percent in some opinion polls. Klingbeil stresses the renewal project will take time, but Social Democrats will be expected to show some signs of life in regional elections in the states of Hessen and Bavaria this October. It is one thing to identify problems. Correcting them, as the SPD knows, is a far more difficult endeavor.