• By The Financial District

3 German Parties Reach Coalition Deal To End Merkel Era

German Social Democrat Olaf Scholz said on Wednesday he had reached a coalition deal to form a new government that will try to modernize Europe's largest economy and bring the curtain down on the Angela Merkel era, Andreas Rinke and Sarah Marsh reported for Reuters.

Photo Insert: German Social Democrat Olaf Scholz gifts outgoing Chancellor Angela Merkel with a bouquet of flowers as she is applauded by members of the Bundesregierung.

Scholz's center-left Social Democrats (SPD), the ecologist Greens, and the libertarian Free Democrats (FDP) want to accelerate the transition to a green economy and digitalization while maintaining fiscal discipline, according to a 177-page agreement.

The alliance - named a traffic light coalition after the three parties' respective colors - has a majority in the lower house of parliament and hopes the government will be sworn in early next month after the parties ratify the coalition pact.

The first alliance at a federal level between the ideologically disparate parties will end 16 years of Merkel-led conservative government, marking a new era for relations with Europe and the rest of the world.

At a news conference in Berlin, flanked by the FDP and Greens leaders, Scholz recalled that when the first traffic light was erected at the city's Potsdamer Platz in 1924, many questioned whether it could work.

All the news: Business man in suit and tie smiling and reading a newspaper near the financial district.

"Today, the traffic light is indispensable when it comes to regulating things clearly and providing the right orientation, and ensuring that everyone moves forward safely and smoothly," he said.

"My ambition as chancellor is that this traffic light alliance will play a similarly groundbreaking role for Germany."

Government & politics: Politicians, government officials and delegates standing in front of their country flags in a political event in the financial district.

Merkel leaves big shoes to fill. She has navigated Germany and Europe through multiple crises and been a champion of liberal democracy in the face of rising authoritarianism worldwide. Her critics say she has managed rather than solved problems and leaves her successor tough decisions on many fronts.

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