GERMANY - German minister of labour and vice chancellor Franz Müntefering has resigned.

Olaf Scholz, former general secretary of the SPD, will replace him as minister of labour, while Frank-Walter Steinmeier, currently minister of foreign affairs and recently named SPD deputy chairman, will take over as deputy chancellor.

Announcing his decision early yesterday morning, Müntefering, known for famously comparing foreign private equity firms to locusts, said he was leaving office for "pure familial and personal reasons".

His news came only hours after the governing grand coalition of Christian Democrats (CDU) and Social Democrats (SPD) agreed to extend welfare payments - a defeat for Müntefering.

German commentators said his departure would mark the beginning of the 2009 election campaign - and two years of stalemate for Germany.

Müntefering's wife has been suffering from cancer for a number of years, and Müntefering said during a press conference he made the decision because of the "new, dramatic situation" with his wife's health.

He added: "I know many will see this as politically-motivated," further arguing "there have been plenty of disputes in my political past, but I have always endured them and could also endure them this time. But I ask for people to accept that this really is for private reasons."

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