German Chancellor Angela Merkel defended her 18-year reign in charge of the Christian Democratic Union on Friday as the party prepared to elect a new leader.

Merkel, who announced her intention to step down as party leader but remain as Chancellor in October, gave a staunch defence of her tenure in an emotional speech that was met with a 10-minute standing ovation from delegates inside the auditorium in Hamburg.

Speaking ahead of the leadership vote, she told the party's congress that the CDU must “look forward” but remain loyal to the values that have long been fundamental to its electoral success.

“Our CDU is different today than it was in 2000, and that's a good thing because the CDU of the year 2018 has the claim to look not in the past, but in the future: with new minds, new structures – but with lasting values.”

Merkel's decision to leave the role came after a difficult period of her tenure. The cracks began to surface earlier this year as she repeatedly clashed with Interior Minister Horst Seehofer over immigration.

Then, in August, Germany was stunned as right-wing extremists hijacked public anger over the killing of a man in Chemnitz in the east of the country. Young men were photographed giving brazen Nazi salutes next to protesters railing against Merkel's migration policy.

The final blow was the combined result of regional elections in Bavaria and Hesse, which showed that normally centrist voters were fleeing to the fringes, whether to the left-wing Greens or to the far-right Alternative for Germany (AfD).

Merkel's decision to step aside means that whoever wins the leadership elections is likely to lead the CDU into the 2021 Federal elections and could potentially become the country's next Chancellor.

The two leading candidates for the role are CDU general secretary Annegret Kramp-Karrenbauer, nicknamed AKK, and corporate lawyer Friedrich Merz, who lost out to Merkel for the leadership in 2002.

Kramp-Karrenbauer is often portrayed as a “mini Merkel,” following the Chancellor's leadership path, first as Saarland's regional premier then party secretary, appointed by Merkel.

Rather than outlining her own party vision, AKK went on a “listening tour” across 16 German states, talking to voters and party members. The tour included an overseas excursion to the US to visit White House officials and a BMW plant. That strategy may win her support among CDU members who want the familiar stability of Merkel but may alienate voters who want something new and different.

Merz, on the other hand, is a bold speaker with his own heavyweight backers, such as Bundestag President and CDU elder Wolfgang Schäuble. He has promised to “halve” the number the of voters leaking to the far-right AfD by talking tough on immigration.

Merz has also advocated for greater European Union integration, embracing the eurozone reforms of French President Emmanuel Macron. But while he talks big, Merz has been missing from the political scene for some time. Once the CDU's parliament leader, he was sidelined by Merkel in 2002 and he left politics in 2009 to work with BlackRock, the world's biggest asset management company.

Health Minister Jens Spahn – a critic of Merkel on immigration – is also in the running, though, at 38, he is considered by many too young for the job.

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