The three-party alliance is a first for a German government and creates strange bedfellows, with two left-leaning parties and one, the Free Democrats, that in recent decades allied with the centre-right. But Scholz presented it as a big opportunity.
The new government will not seek "the lowest common denominator, but the politics of big impacts", he promised.
Scholz, 63, said he expects that members of the three parties will give their blessing to the deal in the next 10 days. The biggest challenge is a vote by the Greens' roughly 125,000-strong membership. The other two parties plan to sign off on it at conventions during the first weekend in December, paving the way for parliament to elect Scholz as chancellor during the week starting Dec. 6.
Scholz has been Merkel's finance minister and vice chancellor since 2018 in the outgoing "grand coalition" of Germany's traditional big parties, in which his party was the junior partner. Merkel didn't run for a fifth term, and her Christian Democrats will head into opposition after a disastrous campaign that ended with defeat in Germany's Sept. 26 election.
"We will take over the government in a time of crisis," Green co-leader Robert Habeck acknowledged, describing the coalition deal as a sign of "courage and confidence" that fits those times. "The guiding principle of this government is a society that acts, a state that invests and a Germany that simply works."
Key pledges by the prospective partners include an increase in the minimum wage to €12 ($13.50) per hour from the current €9.60 — a move that Scholz said "means a wage increase for 10 million citizens". And they also aim to get 400,000 new apartments per year built in an effort to curb rising rental prices.
Habeck also said measures planned by the government would put Germany on a path to meet the goals of the 2015 Paris climate accord. It also intends to bring forward Germany's exit from coal-fuelled power from 2038, "ideally" completing it in 2030.
Habeck added that, instead of formally setting new goals for reducing greenhouse gas emissions, it will focus on concrete measures including ensuring that the price per ton of carbon dioxide won't fall below €60 — a measure that will speed up the coal phaseout.
At the Free Democrats' insistence, the prospective partners said they won't raise taxes or loosen curbs on running up debt.
The pro-business party's leader, Christian Lindner, said that "together we have a mission to modernise this country." He proclaimed that "we are going to digitize this state." That's a challenge in a country that has notoriously patchy internet and cellphone coverage and where government services are often offline.
Linder, who is set to become finance minister, also said the coalition would implement more liberal social policies. Those include legalising the sale of cannabis for recreational purposes in licensed shops.
The new government plans to place a greater emphasis on the welfare and participation of children and young people. The coalition deal says it will aim to lower the voting age in European elections from 18 to 16, and aim to change Germany's constitution so 16-year-olds can vote in federal elections too.
Looking beyond Germany, Scholz stressed the importance of a strong Europe, friendship with France and partnership with the United States as key cornerstones of the new government's foreign policy — continuing a long post-war tradition.
It's typical in Germany for coalitions to draw up detailed agreements for their four-year terms; this one runs to 177 pages.
The Social Democrats will get seven Cabinet ministers, including the defence and health portfolios, as well as the chancellory. The Greens will get five, including the foreign minister and a minister for "economy and climate protection", a new combination. Neither party announced who would get those jobs.
The Free Democrats will get four ministries, including the key finance portfolio that goes to Lindner.
He acknowledged that the unexpectedly leak-free talks were "extraordinarily discreet". But he added: "I can assure you that the talks were just as argumentative as they were discreet — we argued over some individual sentences for hours."
Merkel's Christian Democrats are currently preoccupied with a contest over who will become their next leader and revive the party's fortunes after it suffered its worst-ever election result.
Follow AP's coverage of Germany's transition to a new government at https://apnews.com/hub/germany-election.
