LONDON - She's once, twice, three times a chancellor: Angela Merkel, Germany's first female leader, was sworn in Tuesday for her third term, underlining her dominance on the political scene in Europe's biggest economy.

Merkel, 59, returns to power at a time when the region has yet to get back on its feet fully from its still-unresolved debt crisis, and as Germany's relations with the United States continue to suffer from the fallout over revelations that American spies tapped her phone and collected electronic data on ordinary Germans.

Her confirmation as chancellor in a vote by lawmakers in the Bundestag on Tuesday was virtually assured after her Christian Democratic Union, or CDU, came in first place by a wide margin when Germans went to the polls in September. But the party fell just short of a majority of seats in the Bundestag, touching off weeks of negotiation with other groups to form a government.

'Grand coalition'

Merkel will preside over a "grand coalition" uniting the conservative CDU with its archrival, the center-left Social Democrats, who finished second in the election.

The two parties agreed on an agenda that should see a continuation of Merkel's tax-friendly policies tempered by some concessions to the Social Democrats, including Germany's first national minimum wage and some pension increases.

Possible successor

As one of Europe's most powerful leaders, Merkel is unlikely to deviate from Berlin's approach so far to the low-boil euro debt crisis: a fierce insistence on austerity in financially troubled countries, many of whose residents blame Germany for inflicting economic misery on them. The current finance minister, the feisty Wolfgang Schaeuble, will remain in his post.

The new government will include Germany's first female defense secretary, Ursula von der Leyen. The promotion for the former labor minister is widely regarded as a sign that Merkel has picked her out as a potential successor.

Merkel was elected chancellor Tuesday by a 462-150 vote in the Bundestag.