In Germany's last general election in 2002, Mrs Merkel was already party leader, but was prevented from running for the chancellorship and had to hand the job to Edmund Stoiber, the veteran Bavarian Prime Minister.Yesterday Mr Stoiber demonstrated that the party had finally dropped its qualms by declaring his unequivocal backing for Mrs Merkel before the vote on her candidacy was taken. "We are dominated by the depressing figure of five million unemployed. We need to be faster, more flexible and better in order to compete."Mrs Merkel's election as candidate came after her party's landslide victory in elections in the former leftwing stronghold of North Rhine Westphalia on 22 May, which ended 39 years of Social Democrat rule in the state. The Social Democrats' humiliating defeat, taken as a resounding vote of no-confidence in Chancellor Schr?'s government, prompted Mr Schr? to call for a general election to be brought forward by a year.

Angela Merkel is firmly in the running to become Germany's first female chancellor after opposition conservatives elected her as their candidate to challenge Gerhard Schr? in elections scheduled for the autumn. Mrs Merkel, 50, leader of the Christian Democrats (CDU), was chosen by leaders of her own party and its sister organisation, the Bavarian Christian Social Union, by unanimous vote at the conservative party headquarters in Berlin.Smiling broadly before television cameras afterwards, Mrs Merkel welcomed the prospect of a general election, expected in September, and said she was committed to reducing the country's crippling unemployment burden "We need an agenda for jobs," she said. Chirac will play to precisely that gallery, or that a future left-wing president, post-2007, could question the free market religion of the EU. If that happens, the single market of 400,000,000 consumers could unravel.The fallout WINNERSNicolas Sarkozy: A candidate to be prime minister, he is seen as the only leader on the right offering an alternative to the status quoDominque de Villepin: The former foreign minister is the favourite to become prime ministerLOSERSJacques Chirac: The President is seen as a lame duck having led the campaign for a 'yes' voteJean-Pierre Raffarin: The deeply unpopular Prime Minister is expected to be the scapegoat for M Chirac's defeat. Jean-Marie Colombani, the publisher ofLe Monde, said: "Let's reject the voices which are already urging us to fall back on a narrow conception of the 'national interest'."The danger is that M. It consists mostly of teachers, civil servants and other employees in the huge public sector, who do reasonably well within the French system. To that extent, Sunday's result was a conservative revolution against change and against the perceived free-market threat of an enlarged EU. Analysts in the mainstream print media - all pro-treaty - were stunned.

Serge July, the founder and editor of the centre-left daily Lib?tion, said the "yes" camp had "surpassed itself in incompetence, [the "no'' camp] in shameful lies". The linking theme appears to have been fear - fanned by leftist, anti-treaty politicians - that the EU's expansion to the east will destroy jobs in France.But the swing electorate of the centre-left - the only group that has budged since the campaign started - is not composed of blue-collar and unemployed workers (who vote mostly with the anti-EU extremes of right and left). Chirac's centre-right mostly obeyed his calls to vote "yes", the President still faces a discredited, directionless, final two years of his second term. Despite three appeals to the nation, despite popularity figures in the 80s at the time of his opposition to the Iraq war two years ago, most French people rejected a constitutional treaty which was M. Chirac's idea.It is now barely conceivable that the President could seek a third term.Exit polls painted a confused picture of voters' motives: two-thirds said they were voting on European issues; two-fifths said they were protesting against unemployment and poverty.