What does the December deal mean?

On Saturday the red-green government and the centre-right Alliance reached a deal that will allow a minority government to get its budget through.

Swedish television SVT reports the deal also lined up three specific areas that will see extra cooperation: energy, defence and pensions.

The pensions group is a long-running discussion involving most of the parties. After joining the government the Greens had entered the group, but the Alliance walked out in protest, as they see the Greens as weakening pensions by opposing economic growth.

Now with the December deal the Greens are in the pensions negotiations, but without the right of veto.

The Sweden Democrats are not in the deal. No party will cooperate with them as they are seen as xenophobic and have a history of links to the white power movement.

The Social Democrats says if any party works with the Sweden Democrats the deal is off.

The December deal will run until 2022 and will mean that if the Alliance wins the 2018 elections they will also be allowed to get their budget passed. 

Until April 2015 the state must spend according to the centre-right budget, at least the red-green government must stay in that framework.

This means no income tax rise for a year, until the autumn 2015 budget. But the government could raise more money by increasing the fees employers pay, or raising VAT.

The red-green Stockholm city administration has already proposed raising more money at its local level by raising municipal tax slightly.

SVT predicts the government will try to get as many policies through, but at a reduced level due to having less ability to raise money.

The government is also able to carry out policies that are not covered by the budget. For example soon after its election the government recognised the state of Palestine.

After the government has put forward its Spring Budget it will be able to carry out its own policies – but it will need either active support from the Left Party or from at least one of the Alliance parties.

The Alliance parties had already said they would be submitting individual budgets, and coming together as a tight coalition only for the 2018 election.

The current crisis was caused by the Sweden Democrats voting the centre-right budget through parliament. The prime minister had promised to call a new election, but the December deal instead allows him to remain in office.