Getty ImagesGermany's conservatives under Friedrich Merz have reached a deal with the Social Democrats to govern Europe's biggest economy, five months after the previous government collapsed.
Merz, 69, said their deal sent "a strong and clear signal" to Germans and the EU that Germany "will get a strong government capable of action".
The two sides have been under intense pressure to put an end to Germany's political limbo since Merz's Christian Democrats won federal elections in February.
Germany has been buffeted by economic turbulence caused by President Donald Trump's trade tariffs, and recent opinion polls suggest the far-right, anti-immigration Alternative for Germany has now overtaken Merz's party.
Merz, 69, may have to wait until next month for the new parliament to elect him as chancellor, but should have no problem with a 13-seat majority.
Announcing the coalition deal, he said the parties had worked very hard over the past few weeks, but "ahead of us we have a strong plan to bring our country to the forefront again".
Merz promised the next government would reform and stabilise Germany and that the rest of Europe would be able to rely on the country.
The parties had already signalled their urgency last month, when they pushed through significant reform of Germany's strict debt rules.
The changes will mean the new government will be able to plough significant investment into the military and the country's crumbling infrastructure.
Included in the agreement are a series of measures to control irregular migration, one of the big concerns of voters in the February election.
Merz said he was confident the coalition deal would be approved by their respective parties and that they would be able to get to work in early May.
Meanwhile, an Ipsos poll on Wednesday put Merz's conservatives in second place on 24% support, a point behind Alternative for Germany (AfD), whose co-leader Alice Weidel hailed the survey as unprecedented, and promised that "political change will come".
