Olaf Scholz will become the next chancellor of Germany after his center-left Social Democratic Party (SPD) finalized a deal with the Greens and the pro-business Free Democrats (FDP) on Wednesday to form a new governing coalition.

Why it matters: Scholz, who serves as finance minister and vice chancellor in the current coalition, will lead Europe’s largest economy into the post-Merkel era.

The big picture: The announcement comes three months after the SPD won an astonishing comeback victory in Germany’s elections, narrowly defeating the conservative bloc that had led the government for 16 years under Angela Merkel.

• Scholz is viewed as a steady, experienced politician who is not expected to make radical changes to Germany’s foreign policy.
• He campaigned on raising the minimum wage, tackling climate change and strengthening the European Union, and had a far stronger approval rating than Merkel’s chosen successor, Armin Laschet.

Zoom in: While Scholz has long been expected to be the next chancellor — he accompanied Merkel in her meetings with foreign leaders at the G20 last month — the various portfolios in the coalition of strange bedfellows were only revealed on Wednesday.

• Annalena Baerbock, the chancellor candidate for the Greens, will be foreign minister. Robert Habeck, the co-leader of the party alongside Baerbock, will be vice chancellor.
• The Greens campaigned on a human rights-centric foreign policy and have been highly critical of Russia and China, in stark contrast with the more measured, less confrontational approach favored by both Merkel and Scholz.
• Christian Lindner, who leads the fiscally conservative FDP, will be finance minister. His party favors low taxes, which could prove to be a roadblock as the SPD and Greens push for massive investment to address climate change.