Sweden’s center-left opposition bloc won Sunday’s tight general election by a narrow margin, prompting Prime Minister Ulf Kristersson to resign and closing off the prospect of the far right entering government for now.

A final tally of late votes and overseas ballots was completed Thursday, giving the Social Democrat-led bloc 176 seats against 173 for the current premier and his allies. Just over 50,000 votes separated the sides.

After the result became clear, Kristersson submitted a letter to the parliament speaker, seeking to be relieved of his duties as prime minister effective immediately, to open the way for negotiations on a new government.

Social Democrat leader Magdalena Andersson is now expected to begin what could be tricky talks with allies who disagree with each other over key areas from tax policy to the future of nuclear power.

“The Swedish people have voted for a new direction for our country, voted for unity and against division,” Andersson said in a speech posted on social media. “The Swedish people have voted to move Sweden forward. And I want to realize the new direction that you have voted for.”

The count was paused for two days after Sunday failed to produce a result, as election officials awaited the arrival of some advance votes, as well as the remaining ballots from Swedes residing abroad. Turnout rose to almost 85%, matching the previous election.

Markets have taken the uncertainty in their stride, with the OMX Stockholm Index up 0.6% from Friday. The krona is trading little changed versus the pre-election level of 11.2531 per euro.

Eking out a narrow majority shows how the Social Democrats are suffering from the fragmentation of the political landscape. Their 28% backing is the worst in more than a century and far from their mid-20th century heyday when the party regularly pulled in nearly half of the vote.

Still, the outcome supports a flickering revival of the center left across parts of Europe. U.K. Labour Prime Minister Andy Burnham is seeking to build on a recent bounce in opinion polls and Social Democrats already govern Denmark, Norway and Iceland. Center-left candidates will be tested again in Spain, France, Poland and in Sweden’s neighbor Finland over the coming year.

The result deals a blow to Kristersson’s bid for reelection after his gamble backfired. He had promised to bring his Sweden Democrat allies under leader Jimmie Åkesson into government for the first time.

“It will now require constructive openness from the parties in parliament for a prime minister to be tolerated — and for a new government to be able to secure support for its budget,” Kristersson wrote in a resignation letter. The outgoing premier’s bloc which relied on backing from the anti-immigrant Sweden Democrats had governed with a similarly narrow majority.

By readily adopting a stronger position on crime, Andersson was able to outflank the right on its own turf. She also succeeded in drawing on her party’s history of strengthening public welfare to reassure Swedes feeling the pinch of weak growth and an uncertain job market.

In absolute numbers, the Sweden Democrats lost the most seats, totaling 11, while Andersson’s Social Democrats didn’t fare much better, giving up eight.

Andersson is likely to try and form a government made up of or supported by the Green Party, the Center Party and the Left Party in what appears a daunting challenge. The two latter parties have outlined mutually exclusive red lines, but Andersson insists it will be possible to persuade them to compromise.

A key sticking point will be economic policy with the Left Party favoring higher taxes on income and business earnings to boost pensions and other welfare investments, positions which the Center Party firmly rejects.

Before the final results were clear, Center leader Elisabeth Thand Ringqvist, who has emerged as a kingmaker in the election, said her party will be “constructive” in the talks.

If Andersson fails to stitch together the support to be appointed prime minister, Kristersson will be next in line to try.

Under the Swedish system, a prime minister doesn’t need backing from a majority of lawmakers, but needs to ensure most members of parliament don’t actively oppose them. There can be four parliamentary votes on a new prime minister before a new election must be called.

—With assistance from Christopher Jungstedt, Anton Wilen, Anand Katakam and Alastair Reed.

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