Merkel to challenge Schroder in poll

GERMANY: East Germany's most successful export is Rotkäppchen - the Little Red Riding Hood brand of sparkling wine that survived…

GERMANY: East Germany's most successful export is Rotkäppchen - the Little Red Riding Hood brand of sparkling wine that survived unification and conquered its West German rivals.

Yesterday the Christian Democratic Union (CDU) raised glasses of Erich Honecker's favourite tipple to toast Angela Merkel (50), East Germany's latest successful export.

Dr Merkel took on her West German political rivals to become CDU party leader five years ago and yesterday the scientist-turned-politician became the party's candidate to take on Chancellor Schröder in September's general election.

Supporters, reporters and gawkers packed into the Konrad Adenauer House, the CDU's Berlin headquarters, for yesterday's announcement.

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Though there was just one candidate and the outcome of a party vote was already certain, the air was full of expectation and nervousness.

Then Dr Merkel finally arrived, dressed in peach with a new hairdo and wearing an unusual amount of make-up.

She appeared almost embarrassed by the minutes of sustained applause and battled to keep wearing her serious face before she gave in and flashed a modest smile of victory.

"I want to serve Germany," said Dr Merkel, sounding like a nun taking her vows. "This is not about the party or career. Him or me, him or her. Germany can make it, together we can make it."

She painted a grim picture of seven years of Social Democrat (SPD)-Green rule, with record debt, record unemployment and the lowest economic growth in the EU, all in spite of the government's "Agenda 2010" reforms. "We don't want Agenda 2010. We want Agenda for Work," she said.

Germany's five million unemployed were top of her election campaign, she said, but warned that getting them back to work would require sacrifices.

"Work requires growth, growth requires freedom," she said. "Germans need to become as good as they are expensive . . . faster, more flexible, better, able to do things others can't."

She sketched out her recipe for achieving that: liberalising labour laws, abolishing industry-wide wage agreements, reducing non-wage costs and pushing through a tax reform.

"I won't talk away our problems and I won't offer patented recipes where there are none."

Standing beside her on the stage, looking very much like yesterday's man, was Edmund Stoiber, the Bavarian leader who failed to unseat Chancellor Schröder in 2002. "You have led the CDU to nine state election victories, most recently in the SPD-Green stronghold of North-Rhine Westphalia, a marvellous result," said Mr Stoiber.

"We will fight for victory with all our strength and with full determination. You will always have me at your side."

Mr Stoiber said the ruling SPD was "exhausted and divided".

The early election was proof of the party's failure in government and a desperate attempt to hold the party together rather than do any good for the country, he said.