Angela Merkel is set to become the first woman chancellor in German history, at the head of a power-sharing administration of her Christian Democrats and the Social Democrats, after a deal was struck between the country's two biggest parties.

The coalition's main task will be to revive Europe's biggest economy that is stagnating badly, weighed down by unemployment of more than 11 percent. But less than a day after her elevation to chancellor, even her conservative allies expressed doubts about her ability to hammer out a coalition and keep control of the resulting administration.

The cost of winning her duel with Gerhard Schröder, now stepping down as chancellor after seven years, is a cabinet loaded with his Social Democrats, frequently bitterly at odds with her party. The key to the effectiveness of the grand coalition will be Merkel's ability to keep the different opinions in line.

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