Angela Merkel to step down as party leader by end of year, to leave German chancellor job after 2021

Angela Merkel told her conservative party and Germany on Monday that she is prepared to step down as leader but remain the country's chancellor following a pair of state election disappointments, saying it's "time to start a new chapter."

Merkel, 64, had indicated she planned to seek another two-year term as leader of her Christian Democratic Union at a December party congress, but appeared to be moving quickly to acknowledge pressure for renewal as her fourth-term government struggles to gain traction.

Merkel currently governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties — the CDU, Bavaria's CSU, and the Social Democrats. Her fourth-term government took office only in March but has become notorious for squabbling.

An election Sunday in the central state of Hesse saw both the CDU and the Social Democrats lose significant ground, while there were gains for both the Greens and the far-right Alternative for Germany. Merkel's party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens.

The result followed a battering in a state election in Bavaria two weeks ago for the CSU and the Social Democrats.

"With this decision, I am trying to contribute to allowing the government to concentrate its strength, finally, on governing well — and people rightly demand that," Merkel said.

A national election is not mandated until 2021, but the disappointing results for the coalition partners and a resignation as party leader by Merkel would likely hasten them.

At a news conference in Berlin, she said it was her intention to remain chancellor but this would be her final parliamentary term.

It had been widely assumed this would be Merkel's final term as chancellor, but she had not confirmed that herself.

"I will not run as candidate for chancellor in the 2021 election, and will not seek re-election to the German parliament. And, just for the record, I will not aim for any other political office," she said Monday, likely referring to European Commission elections to be held next year.

Party leader for 18 years

Merkel has led the CDU since 2000 and has been Germany's chancellor since 2005. 

Andrea Nahles, leader of the Social Democrats, on Sunday demanded a "clear, binding timetable" for implementing government projects before the coalition faces an already-agreed midterm review next fall.

Nahles on Monday praised Merkel's achievements in her time as leader and said if things go well with the transition "it
could have a positive effect for us and our work together."

Merkel confirmed reports that Health Minister Jens Spahn and CDU general secretary Annegret Kramp-Karrenbauer have both announced they would vie for the party leadership job.

Spahn has been a critic of Merkel while Kramp-Karrenbauer is widely seen as relatively close to the chancellor. Merkel told reporters, however, that she will let the process play out and not try to influence the decision.

"Historically, that has always gone wrong, and I won't participate in trying to influence discussions on my successor," she said. "I see this as an opening, a phase of opportunities."

The announcement on Monday is a major concession for Merkel, who for years has insisted that the chancellor should also be party leader. But there is precedent for splitting the two jobs.

Merkel's predecessor, Gerhard Schroeder, stepped down as leader of his centre-left Social Democrats in 2004 as his government struggled, but remained chancellor until he narrowly lost an election 18 months later. Helmut Schmidt, West Germany's chancellor from 1974 to 1982, never led the Social Democrats.

"The CDU faces a turning point," Mike Mohring, a regional party leader from eastern Germany, told Welt television. "I have said over the past few days that Angela Merkel knows best what to do, and now she has decided. And that demands respect."

He said it's important to avoid "long personnel debates" and restore people's confidence in the CDU as a governing party.

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.

She allowed in large numbers of asylum seekers in 2015, declaring "we will manage it," before gradually pivoting to a more restrictive approach. That decision has led to lasting tensions in her conservative Union bloc, particularly with the CDU's Bavaria-only sister party, the Christian Social Union.