German Chancellor Angela Merkel has unseated U.S. Secretary of State Condoleezza Rice as the world's most powerful woman, according to a new ranking by Forbes magazine. Last year, Rice had been ranked number one in the Forbes list of 100 Most Powerful Women. Chana Schoenberger, an Associate Editor at Forbes Magazine co-edited this year's World's 100 Most Powerful Women List for Forbes this year. She explained why Merkel was able to get ahead of Rice in this year's ranking. "In general on this ranking, a head of state will outrank someone whose a lower political position. So, of course Condoleezza Rice is the Secretary of State of the U.S. whereas Angela Merkel is the Chancellor of Germany, so she is the democratically elected head of state. If you look at why she is the most important head of state, the countries that have female heads of state and there are actually an encouragingly large number of them now. Of all those women on our list, Germany is the largest, most important economic power of those countries," said Schoenberger. Merkel won a razor-thin victory over Gerhard Schroeder in September 2005 snap elections. She became Germany's first female chancellor in November and presides over a "grand coalition" of her conservatives and the centre-left Social Democrats (SPD). Forbes says that despite her short time in office, Merkel had been dazzling world leaders, including Tony Blair and George W. Bush. According to the magazine, Merkel had improved ties with the United States, which became tense after Schroeder opposed the 2003 U.S.-led invasion of Iraq, and that she was the only woman at the table during this year's summit of leaders from the Group of Eight (G8) industrialized nations in St. Petersburg, Russia. Schoenberger emphasized weighty Merkel's role in foreign affairs, including her willingness to improve relations with the U.S. "She's gotten a lot of respect from both Bush and Blair because she's been willing to stand up, she's been willing to be an important ally to the U.S. and this isn't always a given in Europe which is a place where anti American attitudes are often rampant and even where countries are our allies, they aren't always willing to step up and to help us negotiate. She was trying to take a role in trying to defuse the nuclear crisis in Iran right now, which is still ongoing but she is playing that role," said Merkel. Forbes did add that despite being the supposedly most powerful woman in the world, Merkel still had a tough fight ahead of her because her approval ratings have declined to 56% from 80% earlier this year, making it more difficult for her to win big with key legislative initiatives, including health care reform and corporate tax restructuring. While Merkel quickly emerged as the country's most popular politician, recent polls show her foreign minister, Frank-Walter Steinmeier, has displaced her as the country's most respected official. Rice at the number 2 spot is followed by China's Vice Premier Wu Yi, PepsiCo Chief Executive Indra Nooyi and Xerox Corp CEO Anne Mulcahy. In speaking about Rice's power quotient, Schoenberger said, "We chose her for this very important no. 2 position, last year for no. 1 position because by all accounts she has the ear of the President. She really helps to set foreign policy. She's not just a spokeswoman. She's influential and her ideas are heard in the administration and of course when the Secretary of State of the U.S. gets on a plane and starts doing diplomacy, other countries listen." Others on the world's most powerful women list are Sonia Gandhi (13), president of India's National Congress Party, U.S. talk-show host Oprah Winfrey (14), U.S. Senator Hillary Clinton (18), British Foreign Secretary Margaret Beckett (29) and First Lady Laura Bush (43).