Your Questions Answered on Merkel’s Shock Decision Not to Run Again

(Bloomberg) -- Angela Merkel’s decision not to run again as leader of her Christian Democratic Union party in December has set speculation swirling about who might succeed her. She said Monday that she will step down as German chancellor when her fourth term ends in 2021. Though the rules allow her to be chancellor even if she’s not party leader, that’s not an easy feat, and her hold on the office will hinge on who takes over the CDU.

1. Why has she decided this now?

Crunching losses for the CDU and its national coalition partner, the Social Democrats, in Sunday’s regional election in Hesse again laid bare the government’s instability after similar results in a Bavarian vote two weeks ago. Her surprise announcement could throw potential challengers off balance. That would ease the path of her presumptive successor, at least as party leader, CDU General Secretary Annegret Kramp-Karrenbauer. Merkel may also be hoping that she can focus more on government business.

2. How unusual is a chancellor who isn’t a party head?

Merkel previously insisted that the CDU party leadership and the chancellorship are bound together, but this is not set in stone. Former SPD Chancellor Gerhard Schroeder surrendered the chairmanship of his party before losing the general election to Merkel in 2005. At the time, Merkel called Schroeder’s decision "a loss of authority across the line.” It’s unusual, but not unprecedented, for the main establishment parties to have a chancellor candidate who is not the head of the party. However, whoever succeeds Merkel as CDU leader will almost certainly be the party’s next candidate.

3. What will that choice mean for Merkel’s hold on power?

If the CDU chooses a political enemy of hers, like former parliamentary leader Friedrich Merz, her position would be hard to sustain. There’s a looming power struggle within the CDU: Will the party shift to the right or continue to hew the Merkel line? The outcome will have significant implications for issues from euro-area reform to immigration policy.

4. Who are the leading candidates to be the next chancellor?

With the Social Democrats in disarray, the CDU is likely to provide Merkel’s successor. In a revealing radio interview last week, Merkel herself provided a list of contenders. As well as Kramp-Karrenbauer, they include one of her main conservative rivals, Health Minister Jens Spahn, plus allies such as Economy Minister Peter Altmaier and Agriculture Minister Julia Kloeckner. Merkel also listed four CDU state premiers, including Daniel Guenther of Schleswig Holstein and Armin Laschet of North Rhine-Westphalia. Ralph Brinkhaus, the CDU lawmaker who unexpectedly ousted Merkel’s candidate to lead the parliamentary caucus, isn’t really a contender for the party leadership, but Merkel wanted to point out that she views the CDU’s future not necessarily as one driven by her loyalists. Another possible candidate is former finance minister and party elder statesman Wolfgang Schaeuble. Kramp-Karrenbauer and Spahn have indicated they will run for the party leadership. One person Merkel did not mention is Merz, one of the many rivals she cast aside in her rise to power but who retains strong support in the CDU’s business wing.

5. Would any of these contenders worry financial markets?

Kramp-Karrenbauer, Guenther and Laschet are from Merkel’s more liberal camp, while Spahn, Schaeuble, Merz and Brinkhaus belong to the fiscally conservative wing of the party. Though Merkel’s announcement didn’t shake the euro, a Europe without her raises longer-term questions about the future of the single currency. The chances of more reforms to bolster the euro region could fade, and Germany’s next leader may not be as strongly committed to European integration.

6. What’s next?

CDU leaders will meet Nov. 4-5 in Berlin to prepare for the party convention in Hamburg in early December, where they will vote on their next leader. Party officials will also in coming weeks set the path for how the ruling coalition moves forward following the Bavaria and Hesse setbacks. Then there are four regional votes in Germany next year, starting with the city state of Bremen in May and continuing in September with three elections in eastern Germany. While the CDU and SPD are likely to suffer further steep losses in those former communist states, Merkel’s decision to withdraw from the party leadership will potentially shield her from any fallout and allow her to focus on government business. The collapse of Merkel’s coalition with the SPD remains a threat, which would almost certainly trigger a new general election.

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