October 7, 2005 7:41 pm

Merkel set to take over as German leader

Christian Democrat leader Angela Merkel is set to replace Gerhard Schröder as Germany's next chancellor, in a political deal that will see the departure of Mr Schröder from the national political stage, senior members of the ruling Social Democrats have told the Financial Times.

Ms Merkel's expected victory in the battle for the chancellorship is likely to be announced on Monday, following a meeting on Sunday evening in Berlin between Mr Schröder and Ms Merkel, according to the SPD politicians, who spoke on condition of anonymity. The two leaders met on Thursday evening for four hours to agree the framework of a SPD-CDU grand coalition, but refused on Friday to disclose details. The talks also include SPD leader Franz Müntefering, and Bavarian premier Edmund Stoiber.

Officials close to Mr Schröder said the chancellor would not become vice chancellor and foreign minister in the coalition, despite pressure from within the SPD for him do so. "The chancellor has done what was necessary, to ensure the SPD is on an equal footing with the CDU in the coalition," one official said.

The election yielded a hung parliament but left the CDU holding four more seats than the SPD. Ms Merkel promptly claimed the chancellorship but Mr Schröder, citing his party's unexpectedly strong performance, refused to stand aside.

The announcement on Monday is set to alter the balance of power in Berlin immediately, even though Ms Merkel is not expected to be formally elected as chancellor until mid-November.

Government officials said that it was no longer certain that Mr Schröder would represent Germany at the informal European Union summit near London in late October, adding that it was possible that Ms Merkel would attend.

Senior CDU politicians told the Financial Times that the party was willing to make significant concessions to the SPD to win its support for Ms Merkel's chancellorship. "We have to find a way of avoiding the SPD losing face," one leading parliamentarian said.

The SPD may be given an equal number of cabinet posts as the CDU and be offered first choice of ministries to control, the MP said. SPD officials said these could include the foreign, economics and family ministries.

In addition, the CDU is almost certain to give the SPD assurances - even ahead of lengthy coalition talks expected to start next week - that it will drop key elements of its more radical economic reform agenda, such as changes to job protection and collective bargaining rules.

SPD politicians warned however there would still be resistance in the party to Ms Merkel becoming chancellor. They urged Mr Müntefering to extract as many concessions as possible from the CDU in the weekend talks. The SPD's executive committeecould even refuse to endorse the deal on Monday, according to one leading MP, although others said this was highly unlikely.

If Ms Merkel, 51, does become chancellor it would mark the pinnacle of a remarkable political career. After entering politics in 1990 she has risen through the CDU ranks despite opposition from traditionalists in the male-dominated party. In the 1990s she held ministerial portfolios for the family and the environment and became CDU leader in 2000. She would be Germany's first eastern German and first woman chancellor and the country's youngest post-war leader.

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