"I wish that in difficult times we shouldn't forget our Christian and democratic stance," she said at a CDU party congress, that was due to elect a successor after her 18 years at the helm.
The CDU could achieve good results even in these difficult times, "if we fight united and determined", said the outgoing party leader on Friday in Hamburg.
In her last speech as party leader, she added in a warning note that the CDU and CSU "have experienced the bitter consequences of a never-ending dispute."
Pointing to the rise of populism worldwide and what she called a breakdown of shared Western values, Merkel said the order she had championed was at risk.
"Whether it's the rejection of multilateralism, the return to nationalism, the reduction of international cooperation to deal-making or threatened trade wars… hybrid warfare, destablisation of societies with fake news or the future of our EU – we Christian Democrats must show in the face of all these challenges what we've got," she said.
Merkel, who after more than 18 years at the top of the CDU will no longer hold the chair, was bid farewell by the 1001 delegates with a ten-minute standing ovation. Many held up signs with the inscription "Thank you, boss".
Secretary-General Annegret Kramp-Karrenbauer, former Union leader Friedrich Merz and Federal Health Minister Jens Spahn are applying to succeed her as party leader. Observers expect a neck-and-neck race between Kramp-Karrenbauer and Merz.
It is also eagerly awaited whether Spahn will be able to achieve at least a respectable outcome by securing a two-digit result. In the race for party chairmanship it's expected that he'll be left largely without a chance.
This is the first time since 1971 that the CDU delegates have decided between several candidates in the election of their chairman. The party leader welcomed the competition.
"This is pure democracy if there is a choice," Merkel had declared the day before. Shortly before the election, Spahn stressed that he did not want to make a recommendation for one of the other two candidates in advance, should there be a run-off election between them.