government18 Jan 2019 09:49
After the longest political standoff in its history, Sweden finally has a government.
The parliament in Stockholm voted to let Social Democrat Stefan Lofven become prime minister. He will lead a coalition that straddles both sides of the political divide, but that keeps the nationalist Sweden Democrats away from the levers of power.
“In times when right-wing extremist forces are growing in many countries, Sweden has chosen another way forward,” said Anders Ygeman, who is group leader for the Social Democratic Party.
The New Government
The coalition itself will only comprise the Social Democrats and the Green Party.
The Center Party and the Liberals, which are breaking away from their traditional partners in the center-right Alliance to join Lofven, will provide the parliamentary support the prime minister needs to stay in power.
The Left Party has agreed not to topple Lofven -- at least not for now -- after some last-minute brinkmanship earlier in the week.
This is Lofven’s second stint in office, after he was elected to a four-year term in 2014.
The development brings to an end more than four months of uncertainty in a country usually associated with high levels of political stability. Markets had responded with relative calm to the stalemate, thanks to a well functioning government apparatus behind the scenes, but a lot was resting on Lofven’s success. If he’d failed, Sweden would have faced a snap election, and a very uncertain future.
Relief
“It’s a relief that the threat of a snap election this spring has disappeared,” said Henrik von Sydow, a strategist at Carnegie who also used to be a lawmaker for the opposition Moderate Party. “That would definitely have been an additional risk for investors.”
It’s likely to go down in Swedish history books as a near escape. The Sept. 9 election was inconclusive, and the two biggest parties -- the Social Democrats and the Moderates -- both refused to concede defeat. As the establishment blocs struggled to deal with the new reality, the Sweden Democrats -- with their neo-Nazi roots and euro-skeptic policies -- appeared to emerge as the ultimate kingmakers. The party, which inside parliament has a near pariah-status, had secured almost a fifth of the popular vote.
Political Gridlock
Swedish election failed to produce a clear winner
Among the more established parties, there was a tacit agreement to keep the Sweden Democrats out of any coalition. But the jury is still out as to whether the nationalists can be excluded from influence in the long run.
For now, Lofven needs to ensure he satisfies the centrists without alienating the left. The Center Party and the Liberals want to cut income taxes. The Social Democrats have tended to be ideologically opposed to such a step but have now struck a compromise. The joker remains the Left Party, which has made clear it’s ready to veto policies it doesn’t like, though it won’t have eno