Sweden faces political uncertainty after small party quits government deal

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Sweden faces political uncertainty after the small Christian Democratic Party dropped out of a deal that has kept the minority left-wing government in power.

At their party congress, the Christian Democrats voted to exit the so-called December Agreement in which the center-right opposition pledged to not block the Social Democrat-led government's budget proposals.

The deal was designed to sideline the far-right and anti-immigrant Sweden Democrats, which became Sweden's third-largest party in elections last year.

Many center-right lawmakers criticized the deal because it compelled them to allow the government to impose tax increases and other policies unpopular with the opposition.

The move by the Christian Democrats raised the potential of the December Agreement collapsing, in which case Sweden might have to hold new elections.