Swedish Prime Minister Stefan Lofven said on Saturday that there would be no early elections next year as the left-of-centre government had reached an agreement with opposition parties on a budget.

Mr Lofven told a Stockholm press conference that the deal negotiated among six key parties allowed his minority government to continue ruling and arranging a new election is not “topical anymore.”

“This decision means that Sweden can be governed despite the difficult parliamentary situation.”

Mr Lofven had announced an early election on December 3 but under Sweden’s constitution he had to wait until at least today to officially call one.

But Saturday’s pact, which avoids a vote, was agreed by Mr Lofven’s Social Democratic Party and the Greens — which make up the current government — and four centre-right opposition parties.

Mr Lofven said the deal — dubbed “The December Agreement” — was valid until 2022 and essentially means that the opposition will abstain from voting against the government’s budget proposals starting from April.

It also co-ordinates the parties’ polices on pensions, defence and energy issues.

A government crisis emerged earlier this month as the far-right Sweden Democrats party collaborated with the official opposition to vote against the budget.

The arrangement announced on Saturday excludes the Sweden Democrats, whose racist policies have left it isolated, with the main parties flatly refusing to have anything to do with it.

Mr Lofven’s government took office in October. It holds 138 seats in the 349-seat parliament.