Gerhard Schroeder, Germany's future chancellor, said Monday his center-left Social Democrats will begin formal talks Friday on forming a government with the environmentalist Greens after ousting Chancellor Helmut Kohl in a sweeping vote for change.

Such a coalition would be the most radical in postwar Germany and a test of the Greens' ability to curb their ideals to cooperate with a more mainstream party.The conservative Kohl, who during 16 years in power oversaw the reunification of Germany and helped usher Europe toward economic union, was no match Sunday for the fresh face of Schroeder, a Social Democrat 14 years Kohl's junior.

In a stinging humiliation for the West's longest-serving leader, Kohl and his Christian Democrats won just 35 percent of the vote, which translates to a loss of 49 of the 294 seats it held in the old parliament.

"This is a hard evening for me and for us all," Kohl said in conceding defeat. "I wish Herr Schroeder the best of luck and a successful time in office."

Now it's up to Schroeder - whose Social Democrats won 41 percent of the vote - to make good on pledges to end unemployment, stuck above 10 percent, and to carry out tax and economic reforms.

The Social Democrats held informal talks overnight with the Greens, which won 6.7 percent. With the Greens, a Social Democratic-led government would command a 21-seat majority in the 669-seat parliament.

During the election, the Greens campaigned on platforms that outraged some Germans and amused others: raising gas prices to $3 per liter, introducing a 60 mph speed limit on the autobahn.

These ideas were unlikely to rock a future government, but the two parties may struggle over nuclear energy and military policies.

Schroeder was beaming and giddy Monday during his first post-election press conference, jokingly deferring tough economic questions to his likely finance minister, party chief Oskar Lafontaine.

He became serious, though, in addressing concerns about what concessions the Social Democrats might have to make to secure cooperation from the pacifist wing of the Greens.

"The Greens are going to have to prepare for a clear and tough round of talks," Schroeder said.

Schroeder said Germany's foreign policy would remain constant, addressing anxieties about how the pacifist wing of the Greens might affect the country's role in NATO and in international security. He said Germany's role in NATO was not in question.

The Social Democrats will try to reach agreement with the Greens within 30 days. Germany's constitution provides no deadline for forming a government, but parliament must convene by Oct. 27. It will then elect a chancellor, in this case Schroeder, who will in turn designate a Cabinet and coalition.

The Kohl government remains as a caretaker until the new parliament convenes.

The Greens have warned the Social Democrats not to try to shore up a new government by bringing in other parties, including the liberal Free Democrats, Kohl's junior coalition partners. They won 6.2 percent.

"Our signal is clear: according to us there can only be negotiations with one party," said Heide Ruehle, a Greens' party leader.

The Frankfurt stock exchange was trading higher Monday, contrary to expectations that a Social Democratic victory would drive the market down. Analysts said the market was reacting primarily to an agreement on banking reform in Japan.

Around the world, politicians of the left welcomed Schroeder's victory, claiming the result as fresh evidence that the political tide was running their way.

"A new epoch is coming. Many countries have become much more leftist in nature," said Russian Communist Party leader Gennady Zyuganov.

Kohl had sought an unprecedented fifth term on the strength of his image of stability and clout with world powers at a time of economic turmoil in Russia and conflict in the Balkans.

He conceded the race by announcing he would step down as the leader of his party. His party lost support in all of Germany's 16 states, and Kohl was even defeated by the Social Democrats in his Rhine River hometown of Ludwigshafen.

The new chancellor will be the first of his generation, rooted in the 1960s leftist movement, to lead Europe's biggest nation. Throwing up his arms in a victory salute, the 54-year-old Schroeder promised cheering supporters he would fight unemployment.

"The Kohl era has come to an end," Schroeder proclaimed. "Our task will be to thoroughly modernize our country."

Besides tackling nitty-gritty reforms, Schroeder must lead Germany through two enormous changes next year: the return of the government to Berlin, its prewar capital, and the exchange of the trusted German mark for Europe's common currency, the euro.

Turnout for Sunday's election was 81.5 percent of Germany's 60.5 million voters, up from 79 percent in 1994.