Berlin - Christian Democrat (CDU) Chancellor Angela Merkel pledged continued cooperation with the Social Democrats (SPD) in her grand coalition government Monday, after the SPD named Foreign Minister Frank-Walter Steinmeier to challenge her in German elections next year.

Merkel criticized the weekend manoeuvring in her junior coalition partner that saw the popular Steinmeier named as the SPD candidate for the chancellorship and Kurt Beck ousted as party chairman.

Berlin- Germany's Social Democrats (SPD), ailing in the polls, divided on policy and facing a leadership crisis, are set to name charismatic Foreign Minister Frank-Walter Steinmeier as their candidate for the chancellorship in elections next year, according to a report Tuesday.