BERLIN — After two months of talks, German parties on Wednesday announced a new governing coalition that will pave the way for Olaf Scholz, of the center-left Social Democrats, to take over from Chancellor Angela Merkel after her 16 years in power.

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       The Social Democrats, the party which scraped a narrow win in September elections, are allying with two other parties to form a majority government: the climate conscious Greens and the pro-business Free Democrats.

       Nicknamed the “traffic light” coalition due to the party colors of the three factions, Scholz said the new alliance was ready to lead Germany.

       “The traffic light stands,” he said in a joint news conference between the three parties.

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       The new coalition will mark a shift for Germany after more than a decade and a half in power for Merkel’s center-right Christian Democrats, which will now head into the opposition. But few expect drastic departures in policy from a government under Scholz, who served as finance minister in Merkel’s outgoing cabinet.

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       Still, for both Germany and wider Europe where Merkel had taken on the role of a de facto leader, it marks the end of an era.

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       Scholz will formally become chancellor when he is voted in by the Bundestag, Germany’s parliament, which is expected to happen next month. The coalition deal also has to be formally voted in by the parties.

       Scholz will take over the reins of a country being ravaged by a new wave of coronavirus infections, with Germany hitting record numbers of cases in recent weeks. Underscoring the depth of the crisis, Scholz began his speech on Wednesday by addressing the health crisis.

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       “The situation is bleak,” Scholz said, as he outlined how the new government would require that employees would require a negative test, vaccination or to have recovered. “The coronavirus is still not vanquished — unfortunately,” he said.

       As finance minister during the pandemic, Scholz built a reputation as a steady hand, but he will also face broader challenges of geopolitical struggles with Russia and China and an ongoing migration crisis on the European Union’s borders with Belarus.

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       Then there is the task of steering a three-way coalition made up of parties with different ideologies and aims. The coalition is not the most natural of alliances.

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       The Social Democrats’ aims of strengthening the welfare state and the environmental policies of the Greens have not sat easily with the tax-hike averse Free Democrats. Christian Lindner, the leader of the Free Democrats, said talks had at time been hard and the parties had not hidden their differences.

       But the parties have beaten their promise to have a new coalition in place before Christmas and have tried to present a united front.

       “We are united in our belief in progress and in the fact that politics can do good,” said Scholz. “We are united in our purpose to make the country better, take it forward and hold it together.”

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