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A trader watches a television news report showing Germany’s Chancellor Angela Merkel announcing her intention to stand for a fourth term, as the DAX Index curve is displayed beyond inside the Frankfurt Stock Exchange in Frankfurt, Germany, on Monday, Nov. 21, 2016.
German Chancellor Angela Merkel will not stand for re-election as chair of her Christian Democratic Union (CDU) party, multiple news reports said Monday, sending the strongest signal to date that she is slowly winding down her time as leader of the country.
Media reports, citing unnamed party sources, said Merkel would not stand for re-election as CDU chairwoman when the party holds a conference in early December. However, a spokesperson for the party said Merkel wants to remain as the leader of Germany until 2021 when the next federal election is due, Reuters reported. At this time, she would then not stand for re-election as either leader of Germany or as a member of parliament, the news agency said, effectively confirming that this current term as chancellor will be her last.
The move on Monday, following a disappointing regional election on Sunday, opens up a party leadership race within the CDU. But, Merkel will reportedly continue to lead the country even if she is not 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 election.
“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, reacting to the news.
“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 the news, but soon recovered slightly to trade 0.18 percent lower. More information is expected after a CDU press conference at midday London time.
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, 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.”
