BERLIN — Chancellor-designate Angela Merkel on Saturday pledged that her coalition will work to reverse Germany's "downward trend." Amid criticism of a program that features hefty tax hikes, she insisted that her government would not shrink from "doing what we consider right."

Merkel, who is poised to be Germany's first female chancellor, presented her coalition's 143-page accord with the Social Democrats one day after the two sides clinched the deal following weeks of talks.

"We know that we are asking things of people in this country with this accord," Merkel told a news conference. "We want to carry out an honest analysis ... and draw the conclusions in order to do something for this country."

Germany is struggling with an unemployment rate of 11 percent and a chronically sluggish economy. That has weighed heavily on public finances, producing the new government's other major problem: a gaping budget shortfall of $41 billion.

"Our aim is to stop this downward trend and reverse it," Merkel said.

"We want to give people hope of having jobs," she said. "I am absolutely certain — I know — that the success of this coalition will be measured by the question: Are there more jobs?"

The new government will loosen rigid laws that make it difficult to fire workers, rules that industry says discourage hiring. New hires will enjoy legal protection from dismissal after two years, rather than six months at present.

"Naturally, this was not easy for us, but we see the need to do something here," said Social Democratic chairman Franz Muentefering, Merkel's designated vice chancellor and labor minister.

An increase in value-added tax, which will rise to 19 from 16 percent in 2007, will be used partly to cut a payroll levy for unemployment insurance. However, much of the money will go to shore up the budget, and contributions to the state pension system are to rise.

Other measures will include eventually raising the retirement age and cutting a wide range of subsidies.

The conservatives fulfilled the Social Democrats' demand for a higher income tax for top earners. That will mean a new top tax rate of 45 percent, compared with the current 42 percent.

Industry and labor leaders have expressed concern that the tax hikes will dim hopes of a recovery, and German media gave the accord a scathing reception Saturday.

"The two big parties, with decades of doing nothing, have led the country to the verge of bankruptcy (and) are now helping themselves from creditors who cannot defend themselves: our citizens," the mass-circulation Bild daily, which has long advocated tax cuts, said in an editorial.

Merkel said she was optimistic that her government — which will have 448 of the 614 seats in the lower house of parliament — will stand firm in the face of criticism.