Angela Merkel to give up CDU chair after 18 years

German governing parties punished in state election

According to Deutsche Welle, as news of Merkel's move spread, Christian Lindner, who leads the center-right Free Democrats (FDP), said, "She's quitting the wrong office".

That's a major concession for Merkel, who for years has insisted that the chancellor should also be party leader.

That's a title she herself objected to, saying leadership is never up to one person or country.

"With this decision, I am trying to contribute to allowing the government to concentrate its strength, finally, on governing well - and people rightly demand that", Merkel said.

Merkel's weakness at home may limit her capacity to lead in the European Union at a time when the bloc is dealing with Brexit, a budget crisis in Italy and the prospect of populist parties making gains at European parliament elections next May.

Merkel now governs Germany in a "grand coalition" of what traditionally have been the country's biggest parties - the CDU, its Bavaria-only sister, the Christian Social Union, and the Social Democrats.

Merkel's CDU won 27 per cent of the vote Sunday and the Social Democrats 19.8 per cent.

Over the last two weeks, voters in the states of Hesse and Bavaria also punished her party and coalition allies CSU and SPD in two separate regional elections.

The other big victor was the far-right Alternative for Germany (AfD), which entered the Hesse regional assembly for the first time with 12.8 percent of the vote, the ZDF projection showed. "Angela Merkel knows best what to do, and now she has decided".

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Karl-Rudolf Korte, a political science professor at the University of Duisburg-Essen, predicted on ZDF television that its leaders "will do everything to save the "grand coalition" for the next three years". "It will be interesting to see what happens now, because this is initiating a dynamic, the outcome of which is unforeseeable today". The mass-circulation daily Bild also reported that she said she won't run again as party leader.

She said she hopes to open the way for "new success for the CDU" by letting it prepare for her departure as chancellor, and she won't interfere with the choice of a successor.

Merkel's ruling coalition "has lost the confidence of the electorate", said Josef Joffe, publisher-editor of weekly Die Zeit.

The Social Democrats, who were badly beaten in last year's national election, only reluctantly entered Merkel's fourth-term national government in March.

Exit polls show Chancellor Angela Merkel's party leading in a state election in the central German region of Hesse, but a significant drop in support for both her conservatives and their centre-left partners in the national government. If things go well, "it could have a positive effect for us and our work together".

Her message was clear: the SPD needs to be able to show tangible results to its supporters next year or else the party's leaders will pull out of the coalition with Merkel.

Merkel's predecessor, Gerhard Schroeder, stepped down as leader of his center-left Social Democrats in 2004 as his government struggled, but remained chancellor.

Merkel said the election results in Hesse were bitterly disappointing. She has been chancellor for 13 years.

Merkel has dragged the CDU to the political centre, dropping military conscription and abruptly accelerating the shutdown of Germany's nuclear power plants following Japan's Fukushima disaster in 2011. It was the first coalition between the CDU and the traditionally left-leaning Greens to last a full parliamentary term, and an unexpectedly harmonious alliance.

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