(Bloomberg) -- Sweden is moving closer to ending the longest political impasse in the country’s history after a surge in support for the nationalist Sweden Democrats upended decades of bloc rule.

After four months of talks and with a snap election looming, news emerged on Friday that the Social Democrats reached a deal with the Center Party and Liberals to allow Stefan Lofven to continue as prime minister, effectively breaking up the center-right opposition. The agreement needs formal approval over the weekend. There’s also a competing offer for a Conservative-led government, according to people familiar with the proposals who asked not to be identified because the information isn’t public.

Sweden has been submerged in a crisis since an election in September, which saw an anti-immigration group emerge as the third-biggest party and left neither of the two establishment blocs with a majority. A deal with the two smaller opposition parties would allow the Social Democrats to stay in power even after the party posted its worst election result in a century. It would be Sweden’s first cross-the-aisle coalition in 60 years.

Birgitta Ohlsson, a Liberals lawmaker, said in as posting on Instagram that “in these times, and in this case and under these circumstances, this is the best way forward for Sweden’s liberal parties.”

The krona snapped three days of declines, rising 0.1 percent to 10.23 per euro as of 12:51 p.m. in Stockholm.

Aftonbladet reported that the parties have reached a deal on deregulation in the labor market and housing market, which was demanded by the Center Party. The Greens won on reintroducing an aviation tax and measures to allow more immigration, while the Liberals won concessions on school reforms.

As talks have dragged on since September, with both Social Democratic leader Stefan Lofven and opposition leader Ulf Kristersson losing parliamentary prime minister votes, speaker Andreas Norlen last month set a deadline for government talks to end on Jan. 14 with a prime minister vote scheduled on Jan. 16. If that fails, a final and fourth premier vote would then be held on Jan. 23 in a last effort to avoid a new election.

Norlen said in a press release on Friday that he would meet with party leaders on Monday and later that day announce who would be voted on as prime minister on Wednesday.

If the deal clears the last hurdles over the weekend, the vote on Wednesday would then extend Lofven’s time in power even after his disastrous election. He has steered the nation over the past four years, raising taxes and struggling to absorb a record number of immigrants during the migrant crisis.

Martin Enlund, an analyst at Nordea Bank, said there now could be “upside” for the krona ahead of Wednesday’s vote. “Lofven’s government has been extremely unpopular, possibly weighing on consumer confidence,” he said. “Unclear if that will change, but would be good news for consumption and the krona if it did.”

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