Angela Merkel 'to quit as party leader but remain Germany's chancellor'

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BERLIN - German Chancellor Angela Merkel told leaders of her conservatives on Monday that she will not seek re-election as party chairwoman, senior party sources said, heralding the end of a 13-year era in which she has dominated European politics. Her centre-left governing partners were on course for a dismal result, running neck-and-neck with the Greens for second place.

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.

Hesse's conservative governor, Volker Bouffier, told supporters that "the message this evening to the parties in the government in Berlin is clear: people want less argument, more objectivity, more solutions".

Losing ground to their non-mainstream rivals in a series of recent elections, including Local votes in Hesse and Bavaria and the national election a year ago has been viewed as unacceptable by many in a nation which has until recently instinctively tied itself to the centre ground. Confirming polls' predictions, the far-right party, buoyed by a backlash against the arrival of more than 1 million refugees in Germany after 2015, is poised to enter the Hesse parliament, the last of Germany's 16 state parliaments from which it was absent. Crucially, they raise her chance of getting re-elected as party leader at the CDU's convention in December.

Following the close election results, the SPD's leader, Andrea Nahles, has announced a mid-term review of the current coalition government next year, taking the declining voting numbers as a sign that the German electorate is growing exhausted of the coalition's constant in-fighting and lack of progress on bringing legislative change to Germany.

The Social Democrats' leader, Andrea Nahles, demanded Sunday a "clear, binding timetable" for implementing government projects before the coalition faces an already-agreed midterm review next fall. Furthermore, 63 percent of respondents said that the SPD should exit the grand coalition in Berlin and seek renewal in the opposition. "The state of the government is unacceptable".

Just two weeks after Angela Merkel's Christian Social Union allies witnessed their worst election results in decades in Bavaria, her own Christian Democrats are experiencing déjà vu in Hesse's regional vote.

Being able to keep Bouffier, a deputy CDU leader, as governor will stabilize Merkel in the short term, he said.

"Today it is time to begin a new chapter", she told reporters at her party headquarters.

Her term as Chancellor was expected to run until 2021. Her fourth-term government took office only in March but has become notorious for squabbling.

Speaking on October 15, Merkel admitted that voters had lost trust in the government and that it was her job to "make sure that trust is won back".

Ms Merkel's coalition was twice on the brink of collapse, once over immigration policy and then over a dispute about the fate of the domestic intelligence chief who was accused of harbouring far-right views.