Politically, the move was an astute one by a beleaguered chancellor desperate to woo the sabre-rattling unions and rally his rebellious troops behind him before the Social Democrats' party congress.

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The Social Democrats, long the largest party, have run Sweden for most of the past six decades.

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The Social Democrats, the main opposition party, will study the agreement and decide whether to support it in the next 24 hours, a party official said.

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