SPD Foreign Minister to fight Merkel in German poll

By Hans-Edzard Busemann

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.