Angela Merkel took the oath as chancellor of Germany on Tuesday, becoming the first woman and the first person from the former communist east to hold her country's highest office. She quickly convened a meeting of a fragile coalition cabinet, whose members have pledged to end months of political paralysis and pull Europe's largest economy out of five years of stagnation.

"Expectations are very high among people in this country that problems get solved, policies made and decisions taken," Merkel said as she formally took possession of the imposing glass chancellery building from her predecessor, Gerhard Schroeder.

Earlier in the day, the lower house of Parliament elected Merkel chancellor -- 397 in favor, 202 against, 12 abstentions. Applause erupted in the chamber when the numbers were read aloud. "I accept the result," she told fellow legislators, a smile breaking the reserve she usually displays at public functions.

Schroeder, who two months ago publicly told Merkel she would never be chancellor, strode over to offer the first congratulations.

Her swearing-in brought a close to two months of uncertainty that began with the inconclusive election of Sept. 18. In that vote, Merkel's Christian Democrats won a plurality of seats, but not enough to govern on their own or with the partner of their choice, the Free Democrats.

Negotiations began in an effort to form a coalition. After weeks of bargaining, posturing and name-calling, a deal emerged for a "grand coalition" that would team up the country's two largest parties, the Christian Democrats and the Social Democrats, for the first time since 1969.

The coalition hardly guarantees stability, and many Germans do not expect it to last its full four-year term. Internal dissension was on display in the vote, with 51 members of Merkel's coalition voting against her Tuesday.

"Such a large number of no votes is a sign that the new government's foundation is shakier than it claims," said Free Democrat leader Guido Westerwelle.

Merkel's coalition has promised to improve relations with the United States, which were frayed by Schroeder's vocal opposition to the war in Iraq. There is no talk, however, of a dramatic shift in the German position toward the war. The government has refused to send troops but has helped in the training of Iraqi soldiers and police.

The White House congratulated Merkel and expressed hope she would meet soon with President Bush. "We look forward to working closely with Chancellor Merkel and the new government to strengthen the U.S.-German partnership in advancing freedom and prosperity around the world," said Kate Starr, spokeswoman for the National Security Council.

A legislative plan that the two coalition parties have negotiated focuses on how to revive the German economy, which suffers an 11 percent unemployment rate. Both parties agree that the country's generous social welfare system costs too much and is holding back entrepreneurship.

Merkel's party wanted comparatively deep cuts in social welfare, but the Social Democrats, whose heritage is in the labor movement, forced a more cautious approach. Nevertheless, the coalition has agreed to some potentially unpopular changes.

Under the plan, the sales tax for most products would increase from 16 to 19 percent; the retirement age for workers born after 1970 would be 67, up from 65; and companies could more easily hire and fire employees. Work toward health care reform would also continue, but coalition members bickered on that subject even after the deal was reached.

"I did not think the grand coalition got off to a good start," said Barbara Riedmueller, a political scientist at Berlin's Free University. "It has been too focused on the problems with the budget and less on setting a political course and goals for its projects. And that is the question -- if Dr. Merkel can bring optimism to the population."

Merkel has many times been underestimated during her political career. "She has a very direct way, and that is a chance for her to bring a sense of credibility back to politics. Show business is not her style," noted Riedmueller.

Trained as a physicist, Merkel was working as a researcher at the East German Academy of Science when the Berlin Wall fell in 1989. She quickly became active in the Christian Democrat movement, becoming head of the party in 2000.

She comes to office as another easterner, Matthias Platzeck, takes over the Social Democrats. Their simultaneous rise has given unparalleled exposure in the German political world to easterners, a group often eclipsed by west Germans.

Her ascent to office also marks a generational shift. At 51, she is a decade younger than Schroeder and many members of his party.

Not known for emotional outbursts, Merkel increasingly allowed herself to relax and relish the applause during the ceremonial events that unfolded Tuesday.

Following the vote, she visited President Horst Koehler, a member of her own party, who officially named her chancellor and wished her "luck, strength and God's blessing." She then returned to the Parliament to take her oath. The daughter of a Protestant minister, she added the optional "so help me God" to her recitations. Schroeder had skipped those words.

In the evening, Schroeder handed over the chancellery's administrative offices. In a brief ceremony as staff members looked on, Merkel made her most extensive remarks of the day, praising Schroeder as "a German chancellor whom people will remember fondly." He listened, appearing at times to be choked with emotion.

Shortly afterward, Schroeder left the building. He has announced that on Wednesday he will resign his parliamentary seat and return to his profession as a lawyer.

In an editorial Tuesday, the Bild tabloid appealed for the two parties to focus on their tasks and cooperate. "If the coalition fails," it said, "we are all losers."

German Chancellor Angela Merkel receives flowers and best wishes from her predecessor, Gerhard Schroeder, at the chancellery in Berlin.