Time also cited Merkel's strong response to "Vladimir Putin's creeping theft of Ukraine" and on its cover called her "Chancellor of the Free World."
"Not once or twice but three times there has been reason to wonder this year whether Europe could continue to exist, not culturally or geographically but as a historic experiment in ambitious statecraft," Time editor Nancy Gibbs wrote. "You can agree with her or not, but she is not taking the easy road. Leaders are tested only when people don't want to follow. For asking more of her country than most politicians would dare, for standing firm against tyranny as well as expedience and for providing steadfast moral leadership in a world where it is in short supply, Angela Merkel is TIME's Person of the Year."
The news came in as Merkel's spokesman Steffen Seibert was leading a government press conference in the German capital, while Merkel herself was at an event in Leipzig. When asked about it by The Associated Press, Seibert said he had only just received word on his phone himself.
"I'm sure the chancellor will regard this as an encouragement for her political work, for a good future for Germany as well as for Europe," Seibert said.
The other finalists included Donald Trump, who for months has topped Republican polls for the 2016 U.S. presidential election and dominated headlines.
"I told you @TIME Magazine would never pick me as person of the year despite being the big favorite," he tweeted soon after Time's announcement. "They picked person who is ruining Germany."
The other candidates for 2015 were Caitlyn Jenner, Iranian President Hassan Rouhani, the Black Lives Matter protest movement, ISIS leader Abu Bakr al-Baghdadi and Uber CEO Travis Kalanick.
Angela Merkel key career highlights
Route to the top
Merkel became Germany's first female chancellor when she took office in November 2005, and also the first person who grew up in communist East Germany to lead the reunited country. After an early career as a physicist, she entered politics in her mid-30s as communism crumbled. She quickly became a spokeswoman for East Germany's first and only democratically elected leader and, months later, entered then-Chancellor Helmut Kohl's first post-reunification Cabinet. Merkel helped negotiate the Kyoto accord to curb greenhouse gas emissions as environment minister in the 1990s. She became leader of the conservative Christian Democratic Union in 2000 and chancellor after narrowly winning a 2005 election.Diplomatic persistence
Merkel has gained a reputation over the years for diplomatic persistence and helping broker compromises, not least in the unwieldy 28-member European Union. In the crisis over Ukraine, she has stuck doggedly to efforts to keep the leaders of Russia and Ukraine talking in the face of repeated setbacks in implementing a peace accord, while also backing sanctions against Russia. She is fond of a methodical, step-by-step approach to resolving problems.Debt crisis
Merkel has been a dominant figure in shaping Europe's response to the debt crisis that started unfolding in Greece six years ago and flared anew this year. She has insisted that countries carry out painful economic reforms and cut spending in exchange for aid, and was instrumental in getting the International Monetary Fund involved. She has faced criticism abroad for her hard-nosed emphasis on austerity and insistence that there can't be a quick fix, but also has had to fend off critics at home who opposed bailouts for eurozone strugglers.Welcoming refugees
This year's influx of migrants to Europe has proven to be perhaps Merkel's toughest test yet. Germany has been the top destination for people fleeing Syria, Afghanistan, Iraq and elsewhere in hopes of safety and a better life. The flow picked up after Merkel decided in early September to let in people stuck in Hungary. Germany has struggled to house and process the newcomers - some 965,000 were registered as asylum-seekers between January and November. Still, Merkel has stuck to her optimistic insistence that "we will manage it" and refused to name a limit to the number of people Germany can take in, despite mounting criticism from conservative allies. She has pushed - to little avail so far - for more help from other European countries in sharing the burden, and insists that the crisis can only be solved through patient diplomacy.
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