Schroeder quits as party leader

German Chancellor Gerhard Schroeder is stepping aside as chairman of his Social Democratic Party, a move that comes amid stubbornly low poll ratings and squabbling over the government’s future reform course.

Schroeder will remain as chancellor, but said in Berlin today he would hand over the party chairmanship in March to Franz Muentefering, the leader of the Social Democrats’ group in parliament.

“I will concentrate on my work as chancellor and head of government,” Schroeder said.

Muentefering, a close aide who is viewed as being closer to the party’s core voters, will take on responsibility for selling the government’s reform policy to the unsettled Social Democrats.

Schroeder last year pushed through a package of reforms meant to revive the stagnant German economy, trimming welfare benefits and speeding up tax cuts - and struggling to overcome resistance from left-wingers in his own party and Germany’s powerful unions.

The party’s poll ratings have slumped since Schroeder narrowly won a second term in office September 2002, and it suffered several setbacks in state elections last year.

Schroeder has combined the roles of chancellor and party chairman since early 1999, reluctantly taking over the party post when a power struggle with Oskar Lafontaine ended with Lafontaine’s surprise resignation as both party chairman and finance minister.

Friday’s decision “is in the interest of the process of renewal in Germany,” Schroeder said.