The election night of September 27th was a good one for Angela Merkel. Once a pastor's daughter from rural East Germany, she learned that she had soundly defeated her rival, was now on her way to a second-term as German chancellor, and was going to build the conservative/free-market liberal governing coalition she had always wanted.

"We are happy, and I am too. We've done something great," she said amid raucous applause. "We've reached our election goal to form a stable majority in Germany with a new government with the CDU, CSU and FDP, and that's a good thing."

Merkel's smile was surely one of relief at being able to jettison the uncomfortable alliance with her traditional rivals, the Social Democrats (SPD), and replace them with a new governing partner, the liberal Free Democrats, or FDP. The business-friendly party of tax cuts and less regulation fits more closely with Merkel's own ideology than that of the left-of-center SPD.

And as Merkel is sworn is this week for her second term, her coalition has released its plans for the next four years: large tax cuts, increases in education spending, and a bet that the German economy will rebound from its postwar-record doldrums, obviating the need for unpopular cuts in state spending.

Stateswoman

Merkel, 55, can start her second term with considerably more confidence than she did her first. The one-time physicist from the former East Germany who, even when she became a cabinet minister in 1991, looked distinctly uncomfortable in interviews, now seems quite at home on the world stage, hosting major gatherings such as G-8 or European Union summits.

While she now commands the respect of many world leaders, her high profile has also earned her the respect of many Germans. "She is perceived as an almost presidential figure," said Peter Matuschek of the Forsa polling group.

"She has always relied heavily on her performance on the international stage. She has given a very statesman-like impression."

Her success might seem strange to those in countries where politicians need to be bigger than life to be elected, or should have the soaring rhetoric of Barack Obama to motivate, the hyperactive energy of France's Nicolas Sarkozy to energize, or the inspiring back story of someone like Nelson Mandela to inspire. Those qualities are not Merkel's strong suits.

"She definitely lacks the traditional kind of charisma or she lacks some qualities of good speakers," Matuschek said. "However, people rather seem to appreciate her coolness."

Problem solver

Merkel is often derided as a less-than-inspiring public speaker, and it is true that her speeches contain no high-flying rhetoric or emotive outbursts to work up the crowd. She simply lays out in calm, measured, perhaps even dull terms, her party's platform. Her secret is meticulous preparation spiced with a dash of gentle humor. But there is little to be heard of a grand plan for a shining future – this is pragmatic stuff, which is always what Merkel has been concerned with.

"She is not a big visionary. She likes to solve the problems of today and not think about visions of the future," said Gerd Langguth, a political scientist at the University of Bonn who wrote a well-received biography of Merkel published in 2005.

Merkel was born Angela Kasner in Hamburg in 1954 to a Protestant pastor and a teacher. Just weeks after her birth, her father moved the family to East Germany, where he took a job. While it is thought that her family had friendly enough relations with the communist regime, her father's profession did raise suspicions.

Merkel learned to be careful, Langguth said, and to think before she spoke. She knew that to get ahead, she had to excel.

"Because for political reasons, she was only able to study and go to high school because she was best in her class. This was her goal to always be the best she could be. I would say this is the same today," he said.

Too timid?

The twice-married, childless woman from the east has held her own in a party dominated by powerful family men from western Germany. But there are those who think Merkel has fallen short of her best, and that the caution she learned early in life has made her too timid to make big policy decisions. Especially when it comes to reforming Germany's welfare state.

Michael Eilfort of the Market Economic Foundation in Berlin says Merkel "lacks courage" when it comes to her domestic agenda.

During the last four years, her ambitions were checked by the "grand coalition" government she presided over, an uneasy partnership between Merkel's conservative Union bloc and the left-of-center SPD. But Eilfort and others who want to see more market-friendly reforms have complained that Merkel is risk averse when it comes to unpopular moves that could alienate her domestic audience.

"My impression is that Ms. Merkel doesn't dare take needed reform steps if they are painful in the short term" he said. "The price for that down the road will be very high."

On the other hand, it is precisely her penchant for steering a path around potential minefields – such as deeper tax reform, further labor-market or health-care reforms – that has kept her poll numbers far above those of the SPD. As the world staggers through a severe recession, there is a sense of Merkel being the mother to the nation in troubled times.

Able to act

But now that Merkel has the coalition she wants, she can be somewhat more daring. She has already agreed to slash taxes, something that her FDP coalition partners had campaigned hard on. Business leaders have praised the planned 24-billion-euro ($36-billion) tax cut.

"Growth and a republic that emphasizes education are the ideas that are foremost in our minds, as well as the solidarity of our society," Merkel said at a press conference in Berlin as her coalition laid out its priorities.

"This new government is keeping its word. We are not going to increase taxes or paycheck deductions, instead we are focusing on growth and providing relief to our citizens."

That will appeal to many, especially those who are worried about the current financial crisis. Many seem to have faith in Merkel and her business-friendly coalition partners to keep Germany from being hit too hard by the global financial upheaval.

"The chancellor is leading the poor and anxious Germans out of the crisis like Moses through the Red Sea," said Gero Neugebauer, a political scientist at Berlin's Free University.

But she's got her work cut out of her. The tax cut comes at a time when Germany's finances are not in great shape, and she has come under criticism from some in her own party. Spiraling debt levels might force her to cut state spending, which could anger voters. And she's expected to start a health care reform drive which has always proven to be a minefield in Germany.

But on election night, she had words of comfort, not confrontation.

"I'd like to tell the people in this country, I have always wanted to be and continue to want to be the chancellor for all Germans," she told the crowd. "So that our country does better, especially in a crisis such as we are experiencing now."

It was certainly a sweet moment for the woman who was once patronizingly called "the girl" by her political mentor. This "girl" has become, according to Forbes magazine, the most powerful woman on the planet.

Author: Kyle James

Editor: Chuck Penfold