Happy Anniversary, Angie

A pastor's daughter from former communist East Germany, Merkel's rise to power culminated last Nov. 22 as she took the reins of an unwieldy "grand coalition" government after an inconclusive general election.

The result, a marriage of Merkel's conservative Christian Union and its chief political rival, the Social Democrats of her predecessor Gerhard Schröder, has tested her leadership abilities to the limit.

Lacking Schröder's natural charisma, the trained physicist has instead relied on meticulous preparation, gentle humor and a modest style to lead Europe's most populous country and biggest economic power.

Merkel, 52, even dispensed with the champagne traditionally served when the coalition agreement is signed, pouring mineral water instead in a sign of a new sobriety in German politics after the often flamboyant Schröder.

She will nevertheless throw a small cocktail party on Wednesday evening to thank the cabinet "for the good cooperation and good atmosphere" of the last year, her spokesman Ulrich Wilhelm said.

Foreign policy sucesses

Merkel has racked up her biggest triumphs in foreign policy, kicking off the year with a hard-fought compromise on the European Union budget that won her fans across the bloc.

She also improved Germany's relationship with the Bush administration, which was strained after Germany's refusal to join the US-led coalition in Iraq.

Merkel also altered what was seen as Schröder's too-cozy relations with Russia.

Merkel has made a point of wooing president George W. Bush and Vladimir Putin while taking each to task for human rights violations in Guantanamo Bay and Chechnya -- stances that have won cheers at home.

Military missions to monitor the first elections in four decades in the Democratic Republic of Congo and an unprecedented postwar foray into the Middle East to halt the flow of arms to Hezbollah in Lebanon have boosted Germany's stature.

And with Germany set to take over the presidencies of the Group of Eight most industrialized nations and the European Union on Jan. 1, Merkel will find herself under the most intense scrutiny of her career.

Merkel less popular at home

Yet at home, surveys show only a third of the country supports Merkel's conservatives, their lowest score since 2000 and the first time that a sitting chancellor has failed to score popularity points from an economic upturn.

After initial euphoria, the public has expressed frustration with Merkel's slowly-but-surely "policy of small steps" in which she turns her microscope on each reform issue -- health care, pensions, taxes -- with hair-splitting intensity.

"There is disappointment everywhere that this coalition has not used its large majorities in the lower and upper houses of parliament to perform great deeds," the conservative daily Frankfurter Allgemeine Zeitung said this week.

Beyond this tentative approach, Germans are also wary about the resilience of the nascent economic recovery after four years of double-digit unemployment rates.

A planned hike in value-added tax in January will make consumer goods more expensive across the board and potentially snuff out the economic upswing.

And a growing gap between rich and poor has soured the mood and damaged the credibility of the major parties.