Merkel says will step down as German chancellor at end of term

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The CDU's poor result in Hesse, after its sister party in the state of Bavaria, the CSU, suffered its worst result there since 1950 two weeks ago, may turbo-charge a debate about who succeeds Merkel and when.

"We suffered painful losses", said Hesse's incumbent state premier Volker Bouffier. At the time, AfD co-head Alexander Gauland said he would launch a parliamentary investigation into Merkel for her handling of the refugee crisis. The two men are deputy national leaders of their parties. The SPD's top candidate, Thorsten Schäfer-Gümbel, called this outcome "a bitter defeat".

Yahoo Finance UK's Alanna Petroff spoke to Florian Hense, economist at Berenberg, who said "we see a risk that someone could take over the party and she would not serve her whole term [as chancellor]". The backlash, especially in less prosperous eastern Germany, was swift, giving rise to the AfD, which many Germans condemn as a neo-fascist party. That's three times its tally from 2013, the year it was created.

Gains are likely for other smaller parties, and the far-right, anti-migration Alternative for Germany party appears set to enter the last of Germany's 16 state legislatures with support of up to 13 percent. The party received a mere 19.8% of the vote in a state they once considered their stronghold, which has a population of over 6 million people and is home to Frankfurt am Main, one of Europe's largest financial centers. Merkel's party managed an unimpressive win, narrowly salvaging a majority for its regional governing coalition with the Greens. It also proves that Merkel has not lost her instinct for survival even as she is on her way down. But how long can that last as some of the world's biggest economies, including the United States, Italy and, now, Brazil, lurch to the right, their supporters demanding that national interests come first?

Merkel has dragged the CDU to the political centre in her years as leader, dropping military conscription, introducing benefits encouraging fathers to look after their young children, and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011. "Considering the circumstances, we can say that it's a clear mandate to lead the [Hesse] government", he said.

Merkel herself has said in the past that the chancellor should also be the leader of the ruling party.

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Angela Merkel said she was stepping down as CDU chair and remaining German Chancellor.

As a result, questions are being asked about the viability of the ruling coalition in Berlin.

According to a survey, the Social Democrats' dismal showing is mainly due to the lack of central policy proposals that "inspire" voters.

Had the party relinquished control in Hesse, some analysts saw her as vulnerable to an intraparty challenge.

But the woman dubbed the "eternal chancellor" may not get to choose her own timetable - and her departure could be hastened if her junior coalition partner brings down the government before 2021. She can work on backing her successor of choice, Annegret Kramp-Karrenbauer.

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