Angela Merkel has done more to inspire confidence among demoralised Germans than her predecessor Gerhard Schröder managed in seven years of angst-ridden government.

At least that is what fans of the new German chancellor say. For many others, however, there is concern that the "Merkel factor", the psychological boost that has fuelled her personal ratings and seems to have brightened Germany's economic prospects, could get in the way of much needed economic reforms and hinder the gathering rebound.