Berlin ? Angela Merkel becomes Germany’s first female chancellor today, but only after making serious concessions on taxes and welfare-state cuts that could complicate her goal of fixing the sluggish economy and restoring frayed ties with United States.

Merkel, 51, head of the conservative Christian Democrats, needs support from a majority of lawmakers in Germany’s 614-seat lower house to succeed outgoing Chancellor Gerhard Schroeder. Her “grand coalition” with Schroeder’s center-left Social Democrats holds 448 seats, virtually assuring her victory.

Some commentators have speculated that left-wing Social Democrats may snub Merkel in today’s vote, exposing tensions that could jeopardize the government once it gets to work on a host of tricky issues.