Stockholm: The fate of Sweden`s new Social Democrat-led government hung in the balance Wednesday as the parliament began a debate on the 2015 budget.
Prime Minister Stefan Loefven, in office for only two months, has said that if his budget fails to pass, he will resign, likely triggering new elections.
The debate began at 0800 GMT and was expected to end in a vote later in the day.
The Nordic nation plunged into political crisis on Tuesday when the extreme right Sweden Democrats party, which holds the balance in parliament, said it would back a rival budget proposal from the centre-right opposition.
The Sweden Democrats said its decision was in reaction to the government`s pro-immigration policies, even though the opposition, organised in the so-called Alliance, has very similar views to the government on immigration.
The ruling coalition of Social Democrats and Greens has a parliamentary minority of 138 seats in the 349-seat chamber. Even the addition of the 21 seats controlled by the Left Party would not be enough to secure support for its budget.
The four-party opposition, by contrast, could get its budget passed if it combines its own 141 seats with the 49 seats held by the Sweden Democrats.
The government budget includes more public money for the creation of jobs and higher taxes for the rich than the opposition`s budget.
Loefven has made it clear in the media that he will resign if the opposition`s budget is approved.
"It`s out of the question that I would stay on and implement (the opposition`s budget)," he told the daily Dagens Nyheter on Tuesday.At the end of a meeting late Tuesday with the prime minister, the four parties of the centre-right opposition insisted that they would hold on to their budget proposal.
"We`re not prepared to renegotiate, nor are we prepared to split the Alliance," said Annie Loeoef, the chairwoman of the Centre Party.
Both left and right in the Swedish parliament have clearly and publicly announced unwillingness to work with the Sweden Democrats, which could make an exit out of the current crisis difficult.
"Few parties want an early election, but once you`re stuck in this way, it`s hard to extricate yourself," Ulf Bjereld, a political scientist at Gothenburg University, told the daily Dagens Nyheter.
The Greens, who entered into government for the first time in their history after the September election, appeared eager to stay in power.
"We are prepared to negotiate about everything in the budget," the Green Vice Finance Minister Per Bolund told the newspaper Svenska Dagbladet.
Loefven`s government has got off to a weak start, with relatively low support in public opinion polls.
According to a survey carried out by polling service Skop prior to the current crisis, 29 percent of those surveyed thought well of the government`s actions so far, while 28 percent had unfavourable views.
The modest approval ratings reflect, among other things, a view among Social Democrat core voters that the Greens have got too much influence in the new coalition, according to analysts.