Angela Merkel's foes like to paint the Christian Democrats' leader as a neoliberal extremist who'll sacrifice Germany's welfare state to the free market. But even her supporters concede she is no fire-breather. The question really is whether Merkel possesses the force of character and political strength to push the economic reforms Germany needs.

Whatever Merkel, 51, might lack in Thatcheresque zeal, she makes up for in candidness. If Chancellor Gerhard Schroeder is all personality and charisma, she is his antithesis: plain, almost boring on the stump--yet often refreshingly clear and direct. And much like Margaret Thatcher, her status as an outsider to German politics (and her own party) gives her the freedom to rethink a system in obvious need of change, says Dominik Geppert, a political scientist and author of a book in which he compared Merkel to the former British prime minister. As an East German physicist who came late to politics, he says, Merkel is a welcome addition to Germany's close-knit old-boy network.

The daughter of a Protestant country pastor, Merkel retreated under communism to the apolitical world of a quantum-physics lab. It wasn't until the tumultuous days of German unification that she stumbled into politics, joining a fledgling party called Democratic Awakening because, as she says, she "wanted to help." After she switched to the CDU a few months later, the then Chancellor Helmut Kohl (who called her das madchen or "the girl") took her under his wing. Rising to Environment minister in Kohl's cabinet, she made no waves and left little impression. Then, in a bold move in 2000, she made a grab for the party leadership after helping bring down her mentor, Kohl, amid a series of campaign-finance scandals. Since then, she's had a reputation for cold calculation.

Because of her background, says biographer Gerd Langguth, Merkel brings an unusual intellectual rigor to decisions. Perhaps most important, her past seems to have accustomed her to the idea of change. Having lived through communism's collapse, she told a rapt London audience this winter, "I have experienced change as something good, not something to be avoided." Now she must persuade Germans to think the same way.