German chancellor, Angela Merkel, has been named by Time magazine as its person of the year - the first woman to receive the honor in almost 30 years.

Merkel was chosen for her leadership at a time of immense difficulty in managing the prospect of Greek bankruptcy threatening the Eurozone and the migrant and refugee crisis. She becomes the first woman to be named as person of the year since 1986.

Time magazine named Abu Bakr al-Baghdadi, leader of the Islamic State (IS) terrorist group, Republican presidential candidate Donald Trump, Iranian President Hassan Rouhani and America's Black Lives Matter activists campaigning against inequality against African Americans as its runners up.

Since the tradition started in 1927, Merkel is only the 4th woman to win. In 2014, healthcare workers treating the Ebola epidemic were honored. In 2013, it was Pope Francis. President Barack Obama has won twice.

On Monday, Germany announced that it has welcomed over 960,000 asylum seekers in 2015, putting it on track for a million arrivals this year, as conflicts surge in the Middle East, Syria and Afghanistan.

Merkel has been praised by refugees as "Mama Merkel" and mocked by others as the Eurozone's "austerity priestess." But her spectacular rise from communist East Germany defies political convention.

Merkel lives in a Berlin flat with her seldom seen scientist husband Joachim Sauer. She shops in a neighborhood supermarket and spends holidays hiking in the Alps.

She excelled in Russian language, which she has put to good effect in neutralizing the Ukraine conflict with President Vladimir Putin, who was a KGB officer in East Germany when the Wall fell in 1989.

Merkel had stepped in every time a serious crisis had threatened European statecraft this year, Time magazine said.