BERLIN, July 19 (Reuters) - Germany's Angela Merkel threw her weight behind her embattled new defense minister and heir-apparent on Friday, while insisting she herself was fit to carry on serving as chancellor through to the end of her term in 2021.
Merkel, who turned 65 on Wednesday and has been in office since 2005, has suffered several bouts of shaking at public ceremonies in recent weeks that have stirred speculation about her health, though she has maintained she is fine.
On jovial form before taking a summer break, the conservative chancellor said she understood the questions about her health, but told her annual news conference: "I can carry out this role."
She has no history of serious health issues. Her office has given no explanation for the shaking episodes. After one such bout, a government official told Reuters that it was more a psychological issue as she tried desperately to avoid a repeat.
"As a person, I have a strong personal interest in my health and, as I said, 2021 is the conclusion of my political work," Merkel told reporters, adding with a smile: "But then I hope there will be another life (after politics)."
Asked how she was feeling, Merkel added: "Good."
The chancellor, who has loomed large on the European stage since 2005, is trying to stage-manage a slow-motion exit from politics and in December gave up the chair of her Christian Democrats to protegee Annegret Kramp-Karrenbauer.
Despite a series of gaffes this year, Kramp-Karrenbauer took over as defense minister on Wednesday, entering the cabinet in a move likely to make or break her chances of succeeding her mentor as Germany's leader by 2021.
Kramp-Karrenbauer, known as AKK after her initials, was appointed with Merkel's blessing but immediately ran into trouble after giving a lackluster television interview.
"BLA BLA BLAKK," ran a front-page headline in Friday's edition of the mass-circulation daily Bild.
Merkel said she was confident her protegee would do a good job with the defense portfolio, which has proven a poisoned chalice for several recent predecessors.
"I am convinced she will do that very well," she said.
But Merkel added that she would stay out of her conservative bloc's decision on who should run in her place for chancellor at the next federal election in 2021.
"The party will decide who will be chancellor candidate," she said, adding that her Christian Democrats and their Bavarian sister party would do this together.
Merkel attributed a slowdown in Germany's economy, Europe's largest, to "uncertainty in global trading relationships" and said the government would try to stimulate domestic demand.
Cuts to Germany's solidarity tax will help most households and the Finance Ministry will look into easing the tax burden on businesses, she said. "But there won't be a major corporate tax reform."
COALITION "ABLE TO ACT"
Merkel's "grand coalition" with the left-leaning Social Democrats (SPD) has come close to collapse on several occasions since taking office last year, and SPD leader Andrea Nahles quit after setbacks at regional and European elections in May.
But Merkel played down suggestions that the governing alliance was in trouble, saying she had "very, very trustworthy" working relationships with the SPD's interim leaders.
The SPD is plumbing new post-World War Two depths in polls as a result of its decision, deeply unpopular with supporters, to prop up Merkel's government, and is divided over whether to stay in the coalition for another two years.
"We have shown that we are able to act, although to some extent we have to bridge large differences of opinion," Merkel said, adding that she had "great respect" for the SPD's process in handling its leadership change.
"That gives me optimism that we can continue to work very well in government," Merkel said.
An end to the ruling coalition could yet be precipitated by regional elections in three eastern states in the autumn. Polls show the SPD is set to perform poorly.