SPD Foreign Minister to fight Merkel in German poll

WERDER, Germany (Reuters) - Germany's struggling Social Democrats (SPD) chose Foreign Minister Frank-Walter Steinmeier on Sunday to run against Chancellor Angela Merkel in federal elections in 2009.

In a surprise move, Franz Muentefering, a 68-year-old former SPD chairman just back from a break from politics to care for his dying wife, will take over as chairman of the party after Kurt Beck announced his resignation from that role.

The SPD, languishing in opinion polls and threatened by the rise of the new Left party, is desperate to end divisions over its direction. This is its fifth change of leadership in just over four years.

The SPD shares power with Merkel's conservatives in an awkward coalition.

"The election campaign does not begin today, but we are now in the game of catching up for the 2009 federal election," said Steinmeier, accepting his party's nomination.

The shake-up, agreed by the party's Steering Committee at a retreat near Berlin, also marks a return to a reformist agenda.

Both Steinmeier and Muentefering are staunch defenders of economic reforms pushed through by former SPD Chancellor Gerhard Schroeder which have turned off many traditional supporters.

While the decision, coming earlier than many expected, smacked of panic, analysts said the partnership could work.

"It won't be easy for the SPD at the next election but this is as good a solution as they could have found," Dietmar Herz, a political analyst at Erfurt University told Reuters.

"I think the worst might be over for them."

Steinmeier, 52, was Schroeder's chief of staff before becoming Germany's top diplomat three years ago. He is viewed as an effective fixer and some polls show he is Germany's most popular politician.

But he has never won elected office and doubts linger as to how inspiring he will be on the election trail.

That is where Muentefering comes in.

Widely seen as a unifying figure, he could help keep left wing members on board. Although he defends reform, he caused a storm in 2005 by likening some financial investors to "locusts", comments seen as a ploy to appeal to traditional SPD members.

"Muentefering is trusted by those on the left but backs Schroeder's reforms -- he embodies the whole party," said Herz.

SQUEEZE

The SPD has found itself squeezed on both sides of the political spectrum, with the emerging Left party luring away their traditional blue-collar voters and Merkel advocating compassionate conservative policies that draw SPD moderates.

A poll by public broadcaster ARD on Thursday showed support for the SPD at 26 percent, 10 percentage points behind Merkel's conservative camp. The Left polled 13 percent. Other recent polls have put backing for the SPD as low as 20 percent.

Beck has been blamed for a slump in the SPD's poll ratings after he alienated many in the party by breaking a promise and flirting with the Left party, reviled by many in the SPD partly because of its roots in the East German communist party.

The Left is led by Oskar Lafontaine, another former SPD chairman who quit the party over Schroeder's reforms and is now loathed as a traitor by many in its ranks.

Conservatives fear Steinmeier, who has attacked Merkel for criticizing China and Russia on human rights, may try to differentiate himself more from her at a crucial time for German foreign policy.

Germany must decide how forcefully it confronts Moscow after its war with Georgia, and rifts between chancellor and foreign minister could complicate efforts to forge a coherent policy.

"Germany needs a foreign minister who is 100 percent dedicated to his job," Eckart von Klaeden, a foreign policy spokesman for Merkel's conservatives, told Spiegel Online.