Merkel defends legacy as party picks new leader

German Chancellor Angela Merkel on Friday offered a staunch defence of her moderate course during 18 years as party leader, as her Christian Democratic Union chose between a loyal deputy and a longtime rival to succeed her.

Accepting a lengthy standing ovation from delegates, many tearful and holding "Thanks, boss" placards aloft, a visibly moved Merkel said the party had won four national elections under her by holding fast to its principles.

"In difficult times we shouldn't forget our Christian and democratic stance," she said.

Pointing to the rise of populism worldwide and what she called a breakdown of shared Western values, Merkel said the order she had championed was at risk.

"Whether it's the rejection of multilateralism, the return to nationalism, the reduction of international cooperation to deal-making or threatened trade wars... hybrid warfare, destabilisation of societies with fake news or the future of our EU -- we Christian Democrats must show in the face of all these challenges what we've got," she said.

The two main candidates, CDU general secretary Annegret Kramp-Karrenbauer, known as AKK, and corporate lawyer Friedrich Merz are locked in a battle over whether to embrace or break with the veteran chancellor's legacy.

A third contender, Health Minister Jens Spahn, 38, an outspoken critic of Merkel's 2015 decision to welcome more than one million asylum seekers to Germany, is running a distant third.

Merkel surprised the country and her party in late October when she announced she would not seek reelection as CDU leader at the party conference in Hamburg after a series of poll setbacks rooted in controversy over her liberal refugee policy.

The contest's outcome is expected to be crucial in deciding whether the influential leader can realise her stated goal of completing her fourth term in 2021 and then leaving politics.

"I hope we emerge from this party conference well-equipped, motivated and united," Merkel said. "I am confident we will succeed."

Merkel has led Germany since 2005 and moved her party steadily toward the political centre. More generous family leave, an exit from nuclear power and an end to military conscription are among her signature policies.

While Kramp-Karrenbauer, 56, is viewed as similar to Merkel with an even temper and middle-of-the-road policies, Merz, 63, has become the torchbearer for those seeking a more decisive break from the chancellor.

This week, Merz -- who has insisted in the face of widespread scepticism that he could work well with Merkel -- won the backing of powerful former finance minister Wolfgang Schaeuble, now the parliamentary speaker.

Both men are seen as harbouring longstanding grudges against the chancellor after she thwarted Schaeuble's ambition to become German president and Merz's desire to remain CDU parliamentary group leader several years ago.

"The Merkel era is palpably coming to an end," political journalist and AKK biographer Kristina Dunz said. "Merz could be tempted to see his revenge and lunge for power (as soon as next year)."

National broadsheet Sueddeutsche Zeitung said Schaeuble's move signalled that the CDU's long-festering divisions, thinly veiled by unity behind Merkel, could well break out in the open after the conference.

"The CDU of the Merkel years is falling apart," it said. "Opposing camps are forming."

Few observers have dared to predict how the 1,001 delegates -- political and party office holders -- will vote.

AKK is believed to have Merkel's strong backing but much will depend on how deep and widespread the longing is for a more conservative profile.

Whoever wins will face towering challenges for the party, which is currently drawing roughly 30 per cent at the polls, far below the around 40 per cent it enjoyed during Merkel's heyday.

It has bled support to the right, in the form of the upstart anti-immigration Alternative for Germany party, and to the resurgent Greens on the left.

Armin Laschet, premier of Germany's most populous state North Rhine-Westphalia, said the CDU needed to begin projecting an image of unity ahead of European elections next May.

"We can't afford another year like 2018 when we fought so much," he told public broadcaster ZDF.