Berlin, Feb 1 (AP) Horst Kohler, a onetime head of the International Monetary Fund who became a popular German president before stunning the country by resigning abruptly in a flap over comments about the country's military, has died. He was 81.

Kohler, who was head of state from 2004 to 2010, died Saturday morning in Berlin after a short illness, surrounded by his family, the office of current German President Frank-Walter Steinmeier said in a statement.

Kohler was little known to most Germans and a stranger to front-line politics before he won the presidency. His nomination was greeted by the mass-circulation daily Bild with the headline "Horst Who?" However, he built up high popularity ratings once in the job, something that he achieved in part by positioning himself as an outsider to the country's political elite.

He occasionally refused to sign bills into law due to constitutional concerns and didn't always make himself popular with the government of Chancellor Angela Merkel, whose choice he was for the presidency - a largely ceremonial job but often seen as a source of moral authority.

Kohler was elected before Merkel came to power, at a time when Germany was struggling to come to terms with labour market reforms and welfare state cuts. He said Germans must not rest on past achievements, and said he was "deeply convinced Germany has the strength for change." In July 2005, Kohler agreed to dissolve parliament and grant struggling then-Chancellor Gerhard Schröder an unusual early election. He declared that Germany faced "giant challenges" and that "our future and the future of our children is at stake." Merkel won power, but nearly blew a huge poll lead after her talk of deeper reform turned off voters. Kohler also talked less of economic change in later years and was strongly critical of financial markets during the banking and economic crisis - describing them as a "monster" that hadn't yet been tamed.

Amid criticism that he appeared to have little to say after winning a second term, Kohler resigned in dramatically abrupt fashion on May 31, 2010. He cited criticism over a radio interview he gave following a visit to German troops in Afghanistan.

In that broadcast, he said that for a country with Germany's dependency on exports, military deployments could be "necessary ... in order to defend our interests, for example free trade routes." That was taken by many as relating to Germany's unpopular mission in Afghanistan, although his office later said he was referring to anti-piracy patrols off the coast of Somalia.

Many wondered whether that was the real reason for the sometimes thin-skinned Kohler's resignation, with critics speculating that he had simply become fed up with a lack of backing from Merkel - for whom his resignation was an embarrassment.

In foreign policy, Kohler won praise for trying to draw attention to the needs of Africa. He became the second German president to address Israel's parliament, telling the Knesset: "I bow my head in shame and humility before the victims" of the Holocaust.

Kohler also paid attention to relations with eastern neighbor Poland, making it the first foreign destination of both of his two terms and saying he would like the country to become as important a partner for Germany as France.

Kohler, the son of ethnic German farmers from Romania, was born on Feb. 22, 1943, in Skierbieszow, in Nazi-occupied Poland. His family fled to Germany after the war - first to Leipzig in what became communist East Germany, then to West Germany in 1954.

Before rising to the presidency, Köhler had a long record as an efficient behind-the-scenes official.

Starting in the early 1980s, he worked for more than a decade in the Finance Ministry under Chancellor Helmut Kohl, who once called him "a treasure" and relied on him in economic diplomacy.

He helped draft the legal framework for Europe's single currency, the euro, and played a role in negotiating German reunification in 1990.

He later served as president of the European Bank for Reconstruction and Development.

In 2000, Kohler emerged as Schröder's backup choice for the IMF leadership. He won American support after Berlin's first candidate, Deputy Finance Minister Caio Koch-Weser, was rejected by the United States as too lightweight.

US Treasury Secretary John Snow later praised Kohler's tenure, saying that “he transformed the institution in terms of its transparency ... and worked to develop better crisis prevention tools and more effective crisis management." Merkel, then Germany's opposition leader, brought him back to Germany as her surprise choice for the presidency four years later, securing his election by a parliamentary assembly.

In a letter of condolence to Kohler's wife, Eva Louise, President Steinmeier wrote Saturday that “many people in our country will mourn with you. For in Horst Köhler we have lost a highly esteemed and extremely popular person who achieved great things - for our country and in the world.” “It was above all his approachability, his infectious laughter and his optimism, his belief in the strength of our country and in the energy and creativity of its people that won him so many hearts. But it was also his often clear and by no means always comfortable admonitions and speeches that won him recognition,” Steinmeier wrote.

Kohler is survived by his wife, daughter Ulrike and son Jochen. (AP) NSA NSA