BERLIN, September 8, 2008 (AFP) - German Chancellor Angela Merkel said Monday the choice of her deputy in government as her opponent in next year's general election would not lead to standstill in Europe's biggest economy.

The conservative Merkel told reporters she had congratulated Foreign Minister Frank-Walter Steinmeier on his nomination Sunday as her challenger next September by his Social Democratic Party.

'I look forward to an exciting electoral campaign,' she said during a visit to Munich, adding that the now-open rivalry with Steinmeier would not compromise their work together in the 'grand' coalition.

Merkel and Steinmeier are the tandem at the helm of the unwieldy left-right government that has run the European Union's most populous nation since the last, inconclusive general election in 2005.

Critics say the unlikely alliance of traditional political opponents has been a recipe for gridlock.

The now-open warfare between the Social Democrats and Merkel's Christian Union at an unusually early point in the election cycle has led to fears it will kill any impetus for reform as Germany faces a global economic slowdown.

Merkel's deputy spokesman Thomas Steg said the two parties had agreed not to start the electoral race yet so the government could get on with its work.

'She assumes that the election campaign will not begin now -- the foreign minister also made that clear yesterday after his nomination,' he told a regular government press conference.

'Both sides assured each other that in the coming months the goal remains to continue their substantive work together in the grand coalition and to use the opportunity to cooperate on governing as long as possible, well into next year, and then to conduct a short, exciting and fair election campaign.'

Merkel and Steinmeier are both highly popular with the electorate but the Social Democrats are trailing the conservatives by up to 20 points in opinion polls.