"It will be a new beginning for our country. In any case I will do everything to work towards that," the 63-year-old said as he took his oath of office in an official handover ceremony in the Berlin parliament.
Scholz was elected chancellor after a secret ballot in which he won 395 out of 707 German lawmaker's votes. Scholz will lead Germany's first federal "traffic light" coalition, made up of the SPD, the ecologist Greens and the liberal Free Democrats (FDP) and named for the parties' colours.
As Germany’s new chancellor, Scholz will lead Europe's largest economy which is currently facing a brutal fourth wave of coronavirus infections.
The SPD-Greens-FDP coalition sealed a pact, titled "Dare for More Progress" last month that pledged “a new beginning for Germany".
The alliance aims to slash carbon emissions, overhaul decrepit digital infrastructure, modernise citizenship laws, lift the minimum wage and have Germany join a handful of countries worldwide in legalising marijuana.
“I know you are starting work highly motivated,” Merkel told Scholz at her chancellery in Berlin, adding: “take this office and work in the best interest of our country — that is my wish.”
Walking a policy tightrope
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'We will write the next chapter together'
Welcoming Scholz’s election, French President Emmanuel Macron congratulated the new chancellor and promised to work with his German counterpart.
"We will write the next chapter together. For the French, for the Germans, for the Europeans," said Macron in a tweet in French and German. He also thanked Merkel for "never forgetting the lessons of history, for doing so much for us, with us, to move Europe forwards".
European Commission President Ursula von der Leyen congratulated Scholz and said she looked forward to working with him for a stronger EU.
"Congratulations, dear Olaf Scholz on your election and appointment as federal chancellor. I wish you a good start and look forward to further trusting cooperation for a strong Europe," she tweeted in her native German.
The EU chief is a member of Merkel's centre-right Christian Democrat party and served in her cabinet before moving to Brussels.
Russian President Vladimir Putin also reacted to the appointment, calling for "constructive” ties with Scholz.
"We are counting on continuity, on the fact that constructive relations will develop between the president and the new chancellor, that the German side will continue to proceed from the understanding that there is no alternative to dialogue to resolve the most difficult differences," Kremlin spokesman Dmitry Peskov told reporters.
Gender balanced
Germany’s incoming foreign minister, Annalena Baerbock, has pledged a tougher line with authoritarian states such as Russia and China after the business-driven pragmatism of the Merkel years.
Baerbock, the Greens co-leader, is one of eight women in Germany's first gender-balanced cabinet.
"That corresponds to the society we live in – half of the power belongs to women," Scholz, who describes himself as a "feminist", said this week.
Scholz and his team promise stability just as France braces for a bitterly fought presidential election next year and Europe grapples with the enduring aftershocks of Brexit.
However a vicious fourth Covid wave has already put the incoming coalition to the test.
"We have to make a fresh start while facing down the corona pandemic – those are the circumstances the new government is up against," Scholz told reporters Tuesday, flanked by his designated finance and economy ministers, Christian Lindner and Robert Habeck.
More than 103,000 people have died with coronavirus in Germany while new infections have surged since the weather turned cold, filling intensive care units to the breaking point.
Scholz has thrown his weight behind Germany following Austria in making jabs mandatory to get the pandemic under control, as experts say the worst is still to come for the country's struggling clinics.
He aims to have parliament vote on the issue before the year is out with a view to implementing the law in February or March.
Merkel 'variant'
Merkel, 67, Germany's first woman chancellor, is retiring from politics after four consecutive terms, the first post-war leader to step aside of her own accord.
She leaves big shoes to fill, with large majorities of Germans approving of her leadership, even if her own party, the conservative Christian Democrats, often bridled against her moderate course.
"For 16 years, Angela Merkel defined the political centre," columnist Nikolas Blome said.
"If she were running again, she would win a fifth term," he added, saying it was nevertheless time for new blood.
Despite being from a rival party, Scholz tapped into that well of popular support in his bid to succeed her.
The left-leaning daily Tageszeitung recently joked about the similarities between the two politicians on its front page, with the pandemic-era headline "Merkel Variant Prevails" and a picture of a grinning Scholz.
Her successor has however pledged to tackle the widening gap between rich and poor under Merkel.
The independent Centre for European Economic Research (ZEW) said in an analysis of the coalition pact that lower-income Germans and parents stood to gain the most from its policy roadmap.
Meanwhile Greens supporters are banking on billions flowing toward climate protection and renewable energy, even as the government pledges to return to a no-new-debt rule by 2023.
(FRANCE 24 with AFP and REUTERS)
Olaf Scholz: Who is Germany's new chancellor?
Image source, Reuters
Image caption,
"If you want Scholz, you'll vote SPD" - Olaf Scholz presented himself as continuity candidate in his campaign
He won Germany's general election, and now the man who's been deputy for three years to Chancellor Angela Merkel has taken on her job.
Olaf Scholz was once unflatteringly nicknamed "Scholzomat" (Scholzomaton) - but he has succeeded in putting his old robot-like, technocratic image behind him and secured an agreement to govern with the Greens and the business-friendly Free Democrats.
The 63-year-old former mayor of Hamburg promised voters continuity after 16 years under the conservative Mrs Merkel, even though he was the candidate for the rival Social Democratic Party (SPD).
Image source, EPA
Image caption,
The vice-chancellor (right) was part of the Merkel government for almost three years
His pragmatic handling of the Covid crisis won him much praise and high approval ratings.
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His detractors rounded on his record as finance minister, accusing him of failures in two big financial scandals.
Managing the Covid crisis
As finance minister, Olaf Scholz oversaw the emergency €750bn (£675bn; $884bn) funding package put together by the federal government to help German businesses and workers survive the pandemic.
"This is the bazooka that's needed to get the job done," said Mr Scholz. "We are putting all our weapons on the table to show that we are strong enough to overcome any economic challenge that this problem might pose."
He chaired cabinet meetings when Chancellor Merkel went into self-isolation as a precaution.
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For all the pain of the Covid crisis, Mr Scholz had a platform to manage a colossal amount of state welfare and fight for social cohesion, true to his left-wing roots.
Image source, EPA
Image caption,
Mr Scholz helped Chancellor Merkel (R) to clinch the EU crisis deal last month
Before his SPD candidacy was announced for the role of chancellor he habitually said, when asked if he would run, "we need to work, not indulge in vanities".
Solidarity with France
With France, Mr Scholz was also lead architect of the EU's €750bn pandemic recovery fund.
Image source, Getty Images
Image caption,
Olaf Scholz's doctor brother Jens helped in Germany's airlift of French Covid-19 patients
And after Angela Merkel's era of close relations with France, Mr Scholz's record in maintaining Franco-German solidarity also works in his favour.
French Finance Minister Bruno Le Maire praised not only him for his solidarity with France, but also his brother Dr Jens Scholz, who airlifted six critically ill French Covid-19 patients to hospital in Kiel. It was an expensive life-saving mission, paid for by the German government.
"So thank you, Olaf, for all you have done already. But thanks also to your brother. It really is a great German family, the Scholz family," said Mr Le Maire.
Frustrations on left
Within the ranks of the SPD, however, Olaf Scholz is seen as a conservative. The party is co-led by Saskia Esken and Norbert Walter-Borjans, who are further to the left.
Image source, AFP
Image caption,
Olaf Scholz (2nd L) relaxing with SPD colleagues in 2018
Mr Scholz, who is married to fellow SPD politician Britta Ernst, grew up in Hamburg and entered politics as a Socialist Youth leader, having studied labour law.
He was mayor of Hamburg from 2011 to 2018, during which time his politics became less radical. He was first elected to the federal parliament (Bundestag) in 1998.
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The SPD was junior coalition partner of Mrs Merkel's Christian Democrats (CDU) for much of the past eight years and many SPD members complained that the policies agreed by their grand coalition or "GroKo" were too conservative.
By way of a contrast, his conservative rival in the elections, Armin Laschet, repeatedly accused him of failing to rule out an alliance with the left-wing Die Linke. It was never likely, but politically it would have been unwise for Mr Scholz to reject it out of hand.
Die Linke's big policy plan to leave Nato never was on his agenda. "Everybody who knows me, knows what they are getting," he said during one debate.
And voters knew that the vice-chancellor had worked in tandem and successfully with Angela Merkel, so he cut through with the electorate better than her anointed successor as a continuity candidate.
His debate performances were widely praised as assured, even if he came across as predictable, and he was helped by a lacklustre campaign from Mr Laschet.
He looked most vulnerable when pressed over his department's handling of two financial scandals, Wirecard and the cum-ex trading fraud.
The collapse of payments company Wirecard was the biggest fraud scandal in modern-day Germany and a report this year said Olaf Scholz bore responsibility for the regulator's failure.
He became caught up in the cum-ex share dividend scam because he was mayor of Hamburg when millions of euros were lost.
And yet neither affair caused him much harm with the voters. Commentators suggested the scandals were just too complex for voters to worry about.
Six days before the election, he unexpectedly appeared in person to answer MPs' questions about money-laundering investigations. One liberal MP said he had a "lack of grip on his own affairs".