Chancellor Angela Merkel confirms she will not run for a fifth term as German leader

Angela Merkel said Monday she will not seek a fifth term as chancellor, effectively beginning the winding down of her time as German leader.

Merkel announced that she will not be seeking any political posts after her term as chancellor ends in 2021. She added that she will also not stand for re-election as chairwoman of her Christian Democratic Union party when it holds an election for the post in December.

“This term is my last as chancellor,” she said, according to a translation. “I will not be seeking re-election as a CDU lawmaker. I will not be seeking any political posts after the current terms ends in 2021,” she added, in what was the first confirmation from the German leader that she will step down after being in power since 2005.

The announcement follows a disappointing regional election in the state of Hesse on Sunday.

Merkel, 64, will continue to lead the country even without being the head of the party. Another chair at the helm of the CDU would then have time to try to build up a popular presence with voters ahead of the next federal election in 2021.

Alluding to the fractious coalition government she leads, Merkel said the party would have secured better results in Hesse had it not been for the situation at the federal level. “The government has lost credibility,” Merkel said at Monday’s press conference.

Vacating the party leadership is seen by some as a move to placate those within her party that might have sought to oust Merkel before her fourth term ends. Carsten Nickel, deputy director of research at Teneo Intelligence, said in a note Monday that Merkel had traded in the “CDU leadership to save her chancellorship.”

Merkel’s comments also mark a shift from her previous stance on party and government leadership. “This is a break with her previous position that a separation of the two roles would weaken her position as chancellor,” Greg Fuzesi, an economist at J.P. Morgan, said in a note Monday.

“It is worth noting at this point that the chancellor is elected by the Bundestag (German Parliament) while the leader of the CDU is elected by CDU party members. Hence, they can be held by two different people.”

The euro fell 0.4 percent against the dollar on reports of her decision earlier in the day, but soon recovered slightly to trade 0.18 percent lower.

Other experts are still skeptical that Merkel could see out a full fourth term. “If she manages to stay on as chancellor after the CDU elects a new leader, probably on December 7, she would still be seen as a lame duck,” Holger Schmieding, chief economist at Berenberg Bank, said in a note Monday.

“By relinquishing her role at the helm of the CDU voluntarily, she may try to head off a challenge from a potential successor which, if successful, could also have toppled her as chancellor.”

Annegret Kramp-Karrenbauer and Jens Spahn both announced their bids for the party leadership on Monday but Merkel declined to publicly back either of them. She said she did not wanted to influence the election of her successor as CDU party leader, Reuters reported.

A regional election in the…

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