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Monday’s German newspapers trumper Angela Merkel’s victory, but she still needs to select a coalition partner and decide on a legacy.Ferdinand Ostrop/The Associated Press

As Angela Merkel begins the slow process of putting together a German government she will also be looking for ways to cement her legacy as one of the country's most successful chancellors.

Ms. Merkel spoke briefly with her main political rival, the Social Democrats, on Monday, taking the first step toward forming a coalition government. The talks are expected to take as long as two months, although Ms. Merkel starts from a stronger position since her party, the Christian Democratic Union (CDU), won 42 per cent of the popular vote in Sunday's election compared with 26 per cent for the Social Democratic Party (SDP).

When a government is formed, Ms. Merkel, 59, will begin her third straight term as chancellor, and this will likely be the last opportunity for her to build a legacy since she has already indicated that she will not serve a fourth term. Until now, analysts say, Ms. Merkel has been largely a good administrator, responding to the financial crisis and managing events. However, she has done little so far to leave her mark on history.

"I think she knows that she is on the peak now," said Joerg Forbrig, a Berlin-based analyst with the German Marshall Fund of the United States, a think tank. "From here, I think she will be walking however gradually downhill. Now the question is what does she want to leave behind and what does she want to be remembered for?"

He and others believe she will focus on Europe, reshaping its institutions, resolving the euro crisis and turning the continent into a major player on the world stage. But doing that will require a major shift in attitude by Ms. Merkel and German politicians who have long abhorred taking an active role internationally, said Mr. Forbrig. "This is the big question mark, whether she can muster … the leadership and vision that both Germany and Europe need at this stage, and that, at the same time, if it worked out, would give her the place in history," he said.

"She's determined to put a brand on Europe and get the crisis behind us once and for all. This is her legacy," added Stefan Kornelius, a German journalist who has written a biography of Ms. Merkel. "If she finally gets the euro crisis behind her, she will go down in history as a great chancellor."

But none of that will be easy. Just building a coalition will be fraught with challenges and compromises. First she has to appease the CDU's sister party, the Christian Social Union (CSU), which only runs candidates in Bavaria and won a massive victory in that state on Sunday. The CSU will likely want key cabinet posts as a reward. Then there's the SDP, a left-of-centre party that has been in coalition with the CDU before under Ms. Merkel, between 2005 and 2009. The SDP is leery about forming another alliance, convinced it was short-changed last time when its support in the 2009 election fell to a post-war low of 23 per cent. It will push hard in coalition talks and also demand key ministries.

A CDU-SDP coalition would also mean a change in attitude toward the euro zone's troubled countries such as Greece, Portugal and Spain. In the outgoing government, the CDU ruled with a pro-business party called the Free Democrats and Ms. Merkel stressed austerity. But the Free Democrats were wiped out Sunday and the SDP is less obsessed with austerity.

"The crisis countries will think that the moment the Social Democrats are on board, life is becoming easier for them," said Mr. Kornelius. "The price [of a coalition with the SDP] for Merkel is pretty high because then she will have to compromise on her main themes especially the euro crisis. … Basically she starts from scratch now in her European policy."

He and others warn not to underestimate Ms. Merkel's capabilities. She is now arguably the most powerful politician in Europe and certainly a force internationally, given Germany's booming economy. She has also been overlooked throughout her political career which began in the former East Germany after the fall of the Berlin Wall in 1989.

"Her strongest characteristic is her calm. And the way she is able to sit and wait for things to develop," Mr. Kornelius said. "She's extremely calm, sitting and waiting for people to self-destruct. … She loves this kind of chess game."

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