Germany’s pro-business Free Democrats have approved a deal to form a new government with two centre-left parties, moving chancellor-designate Olaf Scholz a step closer to taking office as the country’s new leader this week.

The Free Democrats reached an agreement last month to form a coalition with Mr Scholz’s Social Democrats and the environmentalist Greens, effectively crossing the aisle to ally with the two parties.

“This is a coalition agreement for policies of the centre, which won’t shift our country to the left but wants to move it forward,” party leader Christian Lindner told a largely online party convention.

Delegates voted 535 to 37 to approve the agreement, with eight abstentions.

Christian Lindner, leader of Germany’s pro-business Free Democrats
Christian Lindner, leader of Germany’s pro-business Free Democrats (Michael Kappeler/dpa via AP)

After the Social Democrats backed it overwhelmingly on Saturday, only one more hurdle remains before parliament can elect Mr Scholz on Wednesday. This is the result of a ballot of the Greens’ 125,000-strong membership, which is expected on Monday – the biggest challenge for the deal but one it is expected to pass.

Germany’s new government aims to step up efforts against climate change and do more to modernise the country, including improving its notoriously poor mobile phone and internet networks.

It also plans more liberal social policies, including legalising the sale of cannabis for recreational purposes and easing the path to German citizenship, while pledging greater efforts to deport immigrants who fail to secure asylum.

At the Free Democrats’ insistence, the prospective partners have said they will not raise taxes or loosen curbs on running up debt.

Mr Lindner is set to become Germany’s new finance minister, and the party will also get the transport, justice and education ministries.

German chancellor Angela Merkel received a ceremonial send-off in Berlin last week
German chancellor Angela Merkel received a ceremonial send-off in Berlin last week (Odd Andersen/Pool Photo via AP)

The Free Democrats governed West Germany as the Social Democrats’ junior partner under chancellors Willy Brandt and Helmut Schmidt from 1969 to 1982.

But since then, they have allied largely with the centre-right Union bloc of outgoing chancellor Angela Merkel.

But the Union’s election defeat in September and ensuing turmoil in the centre-right bloc made the three-way alliance under Mr Scholz a more realistic option.

Mrs Merkel, who has remained in office as a caretaker chancellor while the new government was being negotiated, will step down this week after 16 years at Germany’s helm.

She did not seek re-election, and her party will now go into opposition.