By Charles Duxbury And Sven Grundberg
STOCKHOLM--Sweden's prime minister on Saturday canceled snap
elections planned for March after reaching a series of deals with
the country's main opposition parties to make it easier for
minority governments to function.
Stefan Löfven said his Social Democrats and junior coalition
partner the Green Party had reached agreements with four
center-right opposition parties to reduce the likelihood of a
minority government's budget being voted down, as was the case
earlier this month.
Speaking at a news conference in Stockholm, Mr. Löfven
identified three areas--pensions, defense and energy--where the
government and the opposition would seek common ground on policy.
Finding common ground would make it easier for the minority
government to push its economic policy through parliament and get
at least passive support from the opposition, potentially avoiding
a recurrence of the political turbulence Sweden suffered this
fall.
The agreement implies that the opposition would abstain where
necessary to allow the government to get its budget approved by
parliament.
Sweden's political instability began after a regular election in
September handed Mr. Löfven's center-left party a relatively narrow
victory and no majority in parliament.
The problems mounted when a combination of the four-party
center-right bloc and unaligned populist party the Sweden Democrats
in early December voted down Mr. Löfven's first budget. That
prompted the prime minister to call snap elections for March in the
hope of winning a stronger mandate for his policy from voters.
However, concerns were raised early that a new election could
merely prolong the uncertainty as the Sweden Democrats had said
they would continue to vote against budgets--center right or center
left--that didn't drastically cut spending on immigration, a
cornerstone of the populist party's manifesto.
In the event, Mr. Löfven stepped back from officially calling
fresh elections, something he had said he would formally do on Dec.
29.
The snap election would have been Sweden's first in over half a
century.
While populist parties have gained political influence in Nordic
neighbors Denmark and Norway, echoing similar developments across
Europe, in Sweden the mainstream parties have ostracized the Sweden
Democrats.
Mr. Löfven has justified this by saying the Sweden Democrats
don't believe all people are of equal worth and raising concerns
about the party's connections with the controversial far-right
movement of the early 1990s--a past the party has long since
disowned and worked hard to distance itself from.
Saturday's cross-party deal underscored the determination of the
mainstream parties to keep the Sweden Democrats at arm's length
despite an increasing number of analysts and commentators
questioning such an approach.
Some analysts have suggested that keeping the Sweden Democrats
out of the political conversation only increases their appeal and
gives weight to their claim of being Sweden's only true opposition
party.
Mr. Löfven said the government's agreement with the opposition
extended Sweden's "proud tradition" of being able to work together
to solve difficult problems.
The leaders of the four center-right parties said they would
continue to represent a strong opposition to the government despite
the agreement to seek common ground in certain policy areas.
Because of the way the voting went on the 2015 budget, Mr.
Löfven will have to stick with many of the opposition's budget
plans--such as tax policy--until he can present a new budget next
fall.
The deal robs the Sweden Democrats of much of their power as a
parliamentary kingmaker, a role it took on when it won 13% of the
vote in the September election.
The party criticized Saturday's cross-party deal, calling it
undemocratic.
"You can't just wish away Sweden's third-biggest party," interim
leader Mattias Karlsson said.
He said his party would seek a vote of no-confidence in the
government, Swedish public service radio reported.
Such a move would have little chance of success, analysts
said.
Write to Charles Duxbury at charles.duxbury@wsj.com and Sven
Grundberg at sven.grundberg@wsj.com