Angela Merkel will not seek re-election in 2021

German chancellor also announced she is stepping down as leader of her party in December

Angela Merkel, the long-serving pillar of stability in Western Europe's leadership, set off a race for her successor on Monday, announcing she would not contest her party’s leadership election later this year.

The East German-raised scientist, who became united Germany’s first female chancellor in 2005, told a news conference that she planned to step down by 2021 and that giving up the party post was the first step in the plan. The 64-year-old said she had decided her fourth term in office would be her last after the Christian Democratic Union (CDU) party slipped 10 percentage points in a regional vote in Hesse state on Sunday.

"I once said that I wasn’t born chancellor," Mrs Merkel said. "That I haven’t forgotten.

“As the chancellor and the chair of the Christian Democrats, the buck stops here, both for successes and failures," she said. "The time has come to open a new chapter."

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Mrs Merkel was named chair of the CDU in 2000, overcoming the early chauvinism that allowed the press to dub her “Kohl’s girl” when she was named minister for women's and youth affairs by former chancellor Helmut Kohl post reunification.

After 2016, when President Donald Trump was elected US president, Mrs Merkel was hailed by many of his opponents as the de facto leader of the free world in the absence of a globally respected American leader.

History is likely to view Mrs Merkel’s spontaneous decision to open Germany’s borders to more than one million refugees fleeing the rise of ISIS and the Syrian civil war as the defining moment of her career. The welcome policy she adopted in the summer of 2015 changed the face of the country but eroded conservative support, paving the way for the rise of the hard-right Alternative for Germany (AfD).

German Chancellor Merkel speaks to U.S. President Trump during the second day of the G7 meeting in Charlevoix city of La Malbaie, Quebec

German Chancellor Angela Merkel speaks to US President Donald Trump during the G7 meeting in Charlevoix city of La Malbaie, Quebec, Canada, June 9, 2018. Reuters

Having seen support for her party drop at the 2017 general election, Mrs Merkel was forced into a third unhappy coalition with the Social Democrats. A debilitating summer row with her own interior minister Horst Seehofer, the leader of the Bavarian faction in the coalition, over a new "immigrant masterplan” resulted in a setback in state elections there earlier this month.

Another damaging election on Sunday in the state that contains Germany’s financial capital, Frankfurt, delivered the last blow to her leadership. As she herself acknowledged, the pastor’s daughter has lost her ability to make the political weather.

“We can’t simply return to business as usual,” she said. “The raw numbers in Hesse were bitter and disappointing.”

It is not yet clear when Mrs Merkel will stand down as the nation’s leader. The CDU is divided and the installation of one of Mrs Merkel’s proteges as party leader could see her remain chancellor for the foreseeable future.

The euro has been under pressure in recent months but barely moved on the exchanges on Monday. At her announcement, Mrs Merkel was at pains to stress that the division of the party post from the government leadership could be managed.

"I do know this hasn't been done before, it is unprecedented, but I believe it offers far more opportunities than risks for the country, for the German government and for my party," she said.

No party to the coalition has any incentive to walk away. The Social Democrats have seen support slump as well and called on their conservative colleagues to quickly resolve the leadership issue.

Mrs Merkel’s preferred successor, Annegret Kramp-Karrenbauer would see a second successive woman take power in Berlin. The low-key former leader of the small state of Saarland is however likely to face a stiff challenge from a handful of contenders.

The most hostile to Mrs Merkel is Friedrich Merz, the head of investment firm BlackRock Germany, who was pushed aside as parliamentary leader of the CDU in a power struggle more than a decade ago.

The 38-year-old health minister Jens Spahn has also declared his candidacy and would be unlikely to accept a subservient position to Mrs Merkel if triumphant. He is a critic of the open-door immigration policy. Other claimants include Ralph Brinkhaus, a fiscal conservative who unexpectedly beat Mrs Merkel’s long-serving parliamentary leader just last month, and two state premiers, Armin Laschet and Daniel Guenther.

Tributes to the German leader came from across the political spectrum. Hesse state premier Volker Bouffier praised the chancellor despite the losses his government suffered. "Angela Merkel has made a noble decision, a right decision, a strong decision," he said.

At the European level there was concern that the German leader, who has acted as the bulwark of the EU project, would create a power vacuum at the heart of the continent.

"The fragility of a country like Germany is always a threat for Europe," Pierre Moscovici, the Economy Commissioner warned. "So we are paying attention."

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