German Chancellor Merkel says to step down

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Chancellor Angela Merkel will not stand again as leader of her centre-right CDU, a party source told AFP Monday, a clear sign that the German leader is preparing for her eventual succession after a series of regional vote defeats.

"Even if Merkel were to be replaced and/or if a new government were to take power in Berlin, with or without new elections, it would not make a major difference once the dust has settled", Holger Schmieding, chief economist at Berenberg, said in a note.

Merkel announced during a meeting with officials that she will not seek to run for re-election at the party's convention in December.

German Chancellor and Chairwoman of Germany's Christian Democratic Union (CDU) Angela Merkel speaks to delegates at the 30th CDU party congress on February 26, in Berlin, Germany.

"European politicians are sad to see her go because she's seen as this element of stability, but the German populace... don't feel like they're being included in fairness of equality of chances to improve their stations in life", she added.

"If one of Mrs Merkel's adversaries prevails as party leader, her chancellorship becomes uncomfortable and possibly untenable", she says.

But she named no successor.

"Secondly, this fourth term is my last as German chancellor".

Market reaction was muted with the euro remaining above last week's low against the dollar on the news, which followed setbacks for Merkel's CDU-led bloc in regional elections this month.

Germany's next national election is due to be held in 2021.

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Bavaria bore the brunt of the 2015 refugee crisis; at its peak, thousands of asylum seekers were crossing into the state every day.

Yet the potential for change in Germany is hemmed in by the country's constitution and relatively strong political center.

The mass arrivals left a deep chasm in German society, and fuelled the rise of the far-right AfD, fundamentally redrawing the political map.

The daily Sueddeutsche Zeitung praised Merkel for her decision, saying the leader who has always been "sober, to the point of being cold" with the political careers of others, has "stayed true to herself".

Anxious to stem the haemorrhage of voters to the AfD, Merkel's conservative Bavarian allies CSU had championed hardline immigration and openly attacked her, all of which ended up alienating moderate voters.

French President Emmanuel Macron, who has a good working relationship with Merkel, hailed her "extremely dignified" decision.

Die Welt reporter Robin Alexander said the path could now be clear for CDU general secretary Annegret Kramp-Karrenbauer, nicknamed AKK, to take the reins.

Nahles nonetheless voiced respect for Merkel's decision, saying the veteran leader has done "an extraordinary service" to the CDU.

Merkel's first step towards the exit will certainly be felt across the European Union, where she has been an unflappable bulwark against global crises, Brexit and an unpredictable ally in the United States.

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