Angela Merkel has been the head of the Christian Democratic Party for 18 years, and Chancellor of the Federal Republic of Germany for 13 years. Her position was widely uncontested until 2015, when she decided to temporarily open the German-Austrian border to refugees who were, at the time, camping in their thousands in Austria and Hungary. She also guaranteed refugees from Syria the right of temporary residence in Germany while the war in Syria was ongoing.
This decision, taken for humanitarian reasons, along with the high number of forcefully displaced persons coming to Germany in 2015 (numbers declined significantly in the following years) had a polarising effect on German society and strengthened right-wing political forces, including the party "Alternative für Deutschland", which is now represented in the national as well as all 16 regional parliaments. The course of events weakened Merkel's position, both in Germany and at the European level. After the German national elections in September 2017 she had great difficulties to form a new government. The new "great coalition" with the CDU's sister party, the CSU, and the Social Democratic Party, proved to be conflict-ridden, volatile and incapable to act consistently.
The decision she took in the wake of the election in Hesse last Sunday (and Bavaria two weeks previously) is a sober and professional reaction to all these developments. It marks the beginning of Angela Merkel's withdrawal from German, European and international politics. I see it as an attempt to give her own party and the country some time to enter into an important and very complex phase of transition. If Merkel stays on as a chancellor (at least for some time) this might also help the EU to adjust to a change of leadership in Germany. Her successor at the top of the party will almost certainly also become the CDU's next candidate for the chancellery. This requires internal clarification and reorganisation. The succession will, indeed, have strategic implications regarding the future political orientation of the party, particularly in the area of domestic politics.
The fact that, by announcing that she will not run for the party leadership in December, Angela Merkel acted contrary to previous statements about the union of party leadership and chancellorship is secondary. One may even argue that it is not true, since it is her first step on the way out of politics. But the issue at stake is much bigger than that - it is about the future of the CDU and the German party system in more general terms. Whether or not things will evolve as she intends will depend on who will be elected at the party convention in December. It will also depend on current and future coalition partners. The AfD, still largely a one-issue-party, will be in an observer's position. Its leaders have already voiced their concern that changes inside the CDU may have negative implications for the AfD.
Perhaps Merkel would have taken the same decision two years ago, had it not been for the already unstable political situation in Germany and the EU. In fact, she probably should have. But at least she took it now and made way for necessary changes inside her own party and beyond. This distinguishes her from oh so many political leaders in Germany, Europe, and beyond, who sadly miss the moment when it is time to step down.