Merkel era set to end in Germany as Olaf Scholz seals ‘traffic light’ coalition deal

The Angela Merkel era is set to end in Germany after Social Democrat Olaf Scholz clinched a coalition deal on Wednesday.

Scholz’s centre-left Social Democrats said they would present their three-way agreement with the Greens and the Free Democrats at a news conference at 3pm (2pm GMT)

The deal after two months of talks will end Merkel’s sixteen-year reign as Chancellor and install Germany’s first three-way federal coalition since the 1950s.

The ‘traffic light’ coalition, named after each of the parties’ colours, marks a watershed moment in German politics and comes after the Social Democrats narrowly won national elections on September 26.

The parties, which have a majority in the Bundestag, the lower house of Parliament, hope to form a government early next month.

However, the alliance will have to manage ideological difficulties in their bid to modernise the economy and accelerate Germany’s green transition.

While the Greens have argued for increased spending, particularly to fight against climate change, the fiscally hawkish Free Democrats are opposed to tax increases or changes to restrictions on new borrowing.

It is expected that Free Democrats leader Christian Lindner will be named the new finance minister, according to Reuters.

Greens co-leader Robert Habeck, 52, has been tipped to take on a newly expanded economy and climate change ministry.

The government will face an immediate challenge in tackling Germany’s soaring Covid rates.

Merkel did not seek re-election after four terms as chancellor, despite her personal popularity remaining high.

Her party, the CDU, is facing a leadership contest after achieving its worst results in the federal election following a gaffe-prone campaign by its candidate Armin Laschet.

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