Merkel roundly backed to steer Germany through rough seas

Chancellor Angela Merkel was overwhelmingly re-elected her party's leader Tuesday as she kicked off her bid for a third term, saying only she could steer Germany through turbulence at home and abroad.

Touting her government as the best in two decades, Merkel, 58, who has led Germany as chancellor since 2005, won record backing among members of her conservative party in her re-election to party head.

"These are turbulent times and sometimes we even find ourselves in rough, stormy seas," she told around 1,000 delegates at a party congress of her Christian Democratic Union (CDU) in the northern city of Hanover.

"But it's Germany's CDU which is safely leading and steering our country through this sea and with a clear compass," she said.

Buoyed in her position as Germany's most popular politician, Merkel is gearing up to lead her CDU to a third term in power in general elections likely to take place in September.

Even after seven years at the helm of Europe's top economy, Merkel still enjoys a level of domestic popularity unseen by any previous post-war German leader and is regarded as the party's trump card in its re-election bid.

She was thunderously re-elected unopposed party chief by nearly 98 percent of delegates -- her best result since taking over as CDU chairwoman in 2000.

"60 minutes Self-Praise, Eight Minutes Applause," commented news weekly Spiegel Online referring to the length of her speech as well as of the standing ovation she received afterwards.

--- 'Most successful government since 1990' ---

But her electoral campaign will not be all smooth sailing.

Her current coalition partner, the pro-business Free Democratic Party (FDP), has seen its political fortunes slump since 2009 and surveys suggest it will struggle to cross the five-percent threshold to enter parliament.

Merkel has said she would prefer to remain with the FDP but told Sunday's Bild newspaper that "it goes without saying" she would hold talks with the opposition Social Democrats and Greens if she was unable to form a tie-up with the FDP.

In a nod to the Free Democrats however, Merkel told the congress that the current CDU-led coalition was "the most successful government since reunification" in 1990.

Unemployment is at its lowest level since 1999 and Germany has never had so many in work, she said.

"While in other European countries, the economy is dramatically contracting, we are Europe's growth engine," she added.

Germany has one of the lowest youth jobless rates in the European Union and is one of the few European countries where workers have not had to accept a loss in salaries in real terms since 2010, she added.

"In times of crisis that is anything but a given."

Merkel said that although the tools for fighting the debt crisis that has ravaged the eurozone for three years had now been created, caution was still needed because the troubles had built up over time.

"It can't be said often enough, the European state debt crisis cannot be solved in one fell swoop, a wave of the wand, the would-be magic cure," she said, mentioning eurobonds and debt write-downs.

Merkel has been the "go-to" leader in the crisis, but her pro-austerity mantra has led her to be vilified by protesters in crisis-hit southern European countries.

At home, however, her tough line in tackling it while defending Germany's interests has won her the approval of two-thirds of voters in polls despite heading a fractious coalition.

She told delegates the euro could emerge from the crisis stronger than it had been at the start of Europe's woes, as Germany had done, and that it was in the country's interest to have a healthy Europe.

Merkel said that in her every decision on Europe, she always had "the whole eurozone in view because every decision we make there has repercussions... on every member but also on Germany".

A motion calling for same-sex couples to receive the same tax benefits as heterosexual married ones, which provoked the day's most heated debate, was rejected by delegates late Tuesday.

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