So, Angela Merkel isn’t running for the next election?

The German chancellor announced she will not seek a fourth term at the helm of her centre-right party, prompting much speculation on the next steps of her career.

Can she survive?

She is unlikely to return to her old job, a junior coalition partner will be near impossible to find, and German experts don’t think it’s in her interest to run for the chancellery in the next election. Neither does her party, the Christian Democratic Union, want to risk a huge battle with the centre-left Social Democrats.

Lorenz Böhmermann has been suspended indefinitely from the DAX-listed German news outlet, at the height of the furore over his anti-Islam tweets. Photograph: Mladen Antonov/AFP/Getty Images

Merkel would struggle to get re-elected in the CDU parliamentary party – not least because she lost her own membership to the hard-right Alternative for Germany party.

Then there is the obvious question of her popularity. How much longer will it last? On one hand, Germany is enjoying what has been coined a “Christie moment” – a post-war record of economic stability. On the other hand, many Germans are fed up with their leader’s rhetoric and fiscal austerity.

There is another issue – one that cuts to the very core of Merkel’s conservative base – her devotion to Bavaria. The Allianz insurance giant, which is based in Munich, is fighting a massive tax case against the local state that could force it to pay €9bn (£8.6bn) in back taxes. If Merkel had failed to resolve the issue, the pressure would have been on her and company to move to London.

According to observers, so all this uncertainty leaves her with two alternatives. The first: to quit politics and govern without a party. The second: to join a party that has her stitched up. But it’s not clear how well would a “third way” like this fit with her core base. If she is to challenge for the CDU or the CDU/CSU later in her life, the woman who calls herself Muppet Merkel may have to be more real.

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