FILE PHOTO: Friedrich Merz delivers a speech during the Christian Democratic Union (CDU) party congress in Hamburg, Germany, December 7, 2018. REUTERS/Kai Pfaffenbach/File Photo

BERLIN (Reuters) - German conservative Friedrich Merz, a former rival to Chancellor Angela Merkel who last month lost the race to succeed her as leader of the Christian Democrats (CDU), is to take a party post focusing on economic policy and transatlantic ties.

Championed by veteran conservative and former finance minister Wolfgang Schaeuble, Merz is popular with members of the party’s right wing who want to change direction from Merkel’s centrist economic and migrant policies.

In particular, the CDU needs to boost its support this year before regional elections in three eastern states where the far-right Alternative for Germany (AfD) is strong.

Merz’s narrow loss to Merkel protege Annegret Kramp-Karrenbauer as party leader exposed divisions in the CDU that both candidates vowed to heal, and she made clear she wanted him to play an active role.

The CDU said Merz would take a position on the CDU commission for the social market economy and would have a special focus on the future of transatlantic ties.

“I am pleased that Friedrich Merz brings his experience and knowledge of economic and financial policy. An excellent strengthening of our circle of experts from representatives of industry and science,” tweeted Kramp-Karrenbauer.

A trained lawyer, Merz had lost out to Merkel in a power struggle in 2002 and has been out of the lower house, the Bundestag, since 2009. Since then he has had various corporate roles including chairman of the German arm of the U.S. investment fund BlackRock.

He had hinted he would like a cabinet post, but Merkel ruled that out.

Merkel relinquished leadership of the party after the CDU haemorrhaged support in a regional election in October, but has said she intends to remain chancellor until the next election in 2021.