Merkel faces unwelcome choices as German president stands aside

[BERLIN] German President Joachim Gauck said he'll stand down after one term, kicking off the nation's election season early by obliging Chancellor Angela Merkel to propose the next head of state.

The decision by Gauck, a 76-year-old former Protestant pastor and East German dissident who has held the mostly ceremonial post since 2012, puts Merkel on the spot to build a coalition to install his successor. No German party has a majority to push through a candidate on its own and the process will be parsed for political messages ahead of parliamentary elections in the fall of 2017.

"I would have wished for a second term," Ms Merkel said on a panel in Berlin on Monday, following Gauck's announcement he'll leave office in March. She said her governing bloc will talk with other parties and "make the appropriate decisions in all calmness."

While Ms Merkel hasn't confirmed she'll seek a fourth term as chancellor, speculation is under way whether her Bavarian allies, the Christian Social Union, might break ranks and field its own presidential candidate after public spats with her over refugee policy. There's also talk of the Social Democrats, Ms Merkel's junior partner in the federal government, fielding a contender together with the opposition Left and Green parties.

Vice Chancellor Sigmar Gabriel, who heads the Social Democratic Party, sought to keep his options open.

"Everybody will talk with everybody," he said in Berlin.

Mr Gauck's successor will be chosen by a special federal assembly next year rather than by public vote, making it highly unlikely that a populist will win the post. Finance Minister Wolfgang Schaeuble has been floated as a possible candidate for Merkel's bloc, a scenario that would free up Merkel to revamp her cabinet before the elections.

Mr Schaeuble, 73, is the nation's longest-serving lawmaker, the dean of euro-area finance ministers and a decisive pillar of support for Merkel within the CDU after last year's migrant influx eroded her poll ratings. Only two other cabinet members have been with Merkel uninterrupted since she won power in 2005: Defense Minister Ursula von der Leyen and Interior Minister Thomas de Maiziere.

Mr Schaeuble might struggle to win cross-party support for the non-partisan role after being blamed for aggravating divisions in Europe during the euro-area debt crisis, notably in Greece. What's more, presidential votes haven't always gone Ms Merkel's way. In 2012, she swung behind Mr Gauck only after her original pick, the CDU's Christian Wulff, resigned two years into his term.

Germany's presidency mostly involves representing the country abroad, though Mr Gauck has also intervened in domestic politics, including on Ms Merkel's handling of the refugee crisis. He ran as an independent and is Germany's first head of state from the formerly communist east.

"Our country has engaged citizens and functioning institutions, so the change in the federal president's office is no grounds for concern," Mr Gauck told reporters Monday in Berlin at Bellevue Palace, the presidential seat. He said he's stepping aside because he may lack the "energy and vitality" for another five-year term.

The vacancy may allow Ms Merkel to rebuild unity between her Christian Democratic Union and the smaller CSU, which has criticized her refugee policy for months as a boon for the anti-immigration Alternative for Germany party. Support for the CDU-CSU dropped to 30 per cent and the Social Democrats polled 19 per cent, both record lows, according to an INSA poll published Tuesday.

Ms Merkel also faces a challenge as her junior partner seeks to assert its independence before heading into an election year.

"The constant infighting among the Union parties is harming the reputation of the entire government, and even of politics at large," Mr Gabriel told a party gathering in Berlin on Sunday. "We Social Democrats have been and will remain a 'Volkspartei' of the left."

BLOOMBERG