Merkel won't seek a 5th term as German chancellor

Larry Hoffman
October 30, 2018

Angela Merkel is reportedly telling her conservative party that she is prepared to step down as its leader but remain as German chancellor.

The decision to stand down from the CDU chairmanship signifies Merkel-who has been chancellor since 2005-is aware her time at the top of German politics is nearing its end.

Merkel's Christian Democratic Union (CDU) sustained heavy losses in the central state of Hesse, slumping to 28% - a 52-years-low and 10 percentage points lower than at the last state election in 2013.

Angela Merkel, Germany's chancellor and Christian Democratic Union (CDU) party leader.

Merkel has been CDU chairwoman since 2000 and while her departure from the party post would not automatically result in her stepping down as German chancellor, the move is an acknowledgment of her increasingly vulnerable position.

Party sources said Friedrich Merz, a former parliamentary leader of Merkel's conservative alliance, would also run.

Several CDU politicians have announced they want to succeed Ms Merkel as party leader. Sunday's result in Hesse means that the Alternative for Germany party now holds seats in every state legislature and federal parliament.

Coming on the heels of an electoral setback for the governing coalition in Bavaria earlier this month, the trouncing in Hesse, which saw the Greens the biggest beneficiary, is prompting questions about whether this defeat will ultimately spell the end of Angela Merkel.

She would ratherwaive the party leadership than not be reelected. Any decline in Merkel's political stature is likely to be seen by investors as a loosening of the fiscal discipline that became a hallmark of her tenure, during which she demanded austerity and economic overhaul in return for bailouts in countries such as Greece.

The rise of populism in Europe is directly attributable to Merkel and European Union leadership.

"I think it's a pity, I think she did a fantastic job, but sadly she has lost support".

FXTM analyst Jameel Ahmad said Merkel's announcement was not the type of news that is expected to have macro-economic implications. "We need a new work culture in the governing coalition and a regeneration of the Christian Democrats", said Annegret Kamp-Karrenbauer, the CDU's secretary-general. Merkel has been under pressure for creating a coalition with the SPD.

The unstable government nearly collapsed twice over the summer, notably when Merkel restrained hardline Interior Minister Horst Seehofer's attempts to toughen up migrant policy. The Social Democrats, who are part of her government's coalition, were also down in this last election. The backlash, especially in less prosperous eastern Germany, was swift, giving rise to the AfD, which many Germans condemn as a neo-fascist party.

The behaviour of one of Germany's most senior Bavarian politicians - he even announced he would leave office a few times, without following through - seemed erratic to many, but Seehofer's deliberate provocations also seemed to show Merkel's dwindling political power.

SPD chief Andrea Nahles said her centre-left party, Germany's oldest, had failed "to break free from the government" and carve out a clear profile of its own after serving in multiple, compromise-laden "grand coalitions".

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