BERLIN: In the year since Angela Merkel took power as Germany's first woman chancellor, she has repaired ties with Washington and charted a bold course on the world stage, helping tackle crises from Iran to the Middle East.

But the diplomatic successes that have burnished her image abroad have not been matched by victories at home, where her popularity has sunk along with the hopes many Germans had for her “grand coalition” of conservatives and Social Democrats.

As Germany gets set to take over the presidencies of the EU and Group of Eight (G8) industrialised nations in January, Merkel is hoping to draw a line under the infighting and policy stumbles that have plagued her government in its first year.

To succeed, analysts say she will need to forge convincing compromises on looming domestic issues from labour market reform to energy policy in the one-year window she has before major state elections in 2008 hamper her room to manoeuvre.

In doing so, she will have to face down rivals in her coalition and party who have diluted her domestic agenda so far.

“Merkel's record is not as bad as her weak ratings would suggest,” said Klaus-Peter Schoeppner, head of polling group Emnid. “But an improvement in her standing depends on her ability to better define her goals and take her party and coalition along with her.”

Despite her thin margin of victory in last year's election and the fragility of her left-right coalition, high hopes greeted Merkel when she took over from Gerhard Schroeder on Nov. 22, 2005.

A modest pastor's daughter from the former communist east, she promised a change in style from her flamboyant predecessor.

With a dominating majority in both houses of parliament, Merkel's coalition looked well placed to push through reforms economists said were needed to get the economy back on track.

A year later, a new balanced style of diplomacy is evident and the German economy is set to grow at its best rate in six years. Both unemployment and the federal deficit are down.

But Merkel has won little credit, sliding in the polls since the summer, when Germany's surprise run to the semi-finals of the soccer World Cup triggered a fleeting wave of feel-good patriotism throughout the country.—Reuters