Sweden’s September 2018 election was a squeaker.¹ The usual two blocs competed: the Social Democrats plus the Greens (Red-Green), supported by the Left Party (former communist), on one side; the Alliance of Conservatives, Liberals, Centre Party (former Farmers’ Party) and Christian Democrats on the other. The result was the narrowest possible victory for Red-Green, 144 seats to 143 for the Alliance, not counting the 62 seats won by the nationalist, populist Swedish Democrats (SD).

The same parties had been in the same situation in two previous elections. In 2010 the Alliance had formed a minority government based on the formula that the Red-Greens accepted: the largest bloc should rule, even if it constituted a minority. This was designed to keep SD out. In the next election, in 2014, the Alliance came out with fewer seats than the Red-Green bloc, again with SD holding a swing vote. And again, to keep SD from having any influence, the Alliance stuck with the agreement that the largest bloc should rule and let the Red-Green minority form a government under the Social Democratic party leader, Stefan Löfven.

This agreement was signed in the face of a protest from groups on the right. A revolt initiated in the Christian Democrats led the Alliance parties to revoke the agreement. Still, for all practical purposes, it was adhered to during that term of office, coupled with an expressed determination by the Alliance to topple the Löfven government in 2018 – at any cost! For many Conservatives and Christian Democrats, this meant a tacit understanding that it would be possible to govern with support from SD. However, the Centre Party and the Liberals ruled out that possibility. This was the context of four months of deliberations after the close outcome of the election.

Four Long Months of Deliberations

After an obligatory vote in Parliament right after the election, Stefan Löfven was ousted as Prime Minister but instead served as caretaker. After many weeks of exploratory talks with all parties, the Speaker of the Parliament (chosen by a coalition of the Alliance and SD) asked Ulf Kristersson, the Conservative leader, to try to form a government. Even though his proposal of a small minority government of Conservatives and Christian Democrats was accepted by SD, it was turned down by a majority in Parliament, including the Centre Party and the Liberals, who pointed out that four years of rule would require the consent of SD unless the Social Democrats tacitly supported the government. Although a group of influential Social Democrats urged their leader to “show real statesmanship” and let the Alliance govern in this difficult situation, he ruled it out. This meant there could be no Alliance-based government.

The inevitable result – after three rounds of voting in Parliament – turned out to be a minority Red-Green government supported by the Liberals and the Centre Party. This was based on an agreement comprising 73 points. Rather than taking part in the government to apply the agreement, which would have been normal in any other country, the Liberals and the Centre Party preferred to stay out. They feared that breaking the tradition of nearly 60 years of two-bloc politics would be seen by some of their supporters as betrayal. Instead, they could point to having succeeded in forcing the Red-Greens to adopt policies that the Social Democrats had vehemently opposed during the election campaign.

Despite policy concessions, the result is a victory for the Social Democrats, who have continuously sought to undermine the non-socialist parties’ solidarity. They previously succeeded in reaching many specific agreements with other parties, mainly centrist but sometimes also including Conservatives, particularly on the issues of taxes, defence and energy. Though Stefan Löfven would probably have preferred a four-party majority government (with the benevolent support of the Left Party), and had to confine himself to cooperation on 73 points (with the grudging support of the Left Party, which had been kept out of negotiations altogether to meet the demand of the Centre Party and the Liberals), he did succeed in effectively breaking the Alliance.

The International Context

The Swedish deal should be seen in the current wider international context. In many parts of the world right-wing forces are gaining power.² In Finland and Norway they have joined the government as coalition members, while in Denmark they have a decisive influence as supporters of the Right-Liberal government. Sweden, however, has managed to be one of the exceptions, along with France, Greece, Spain and Estonia where right-wing parties have been kept out of government.

One reason Sweden is among the exceptions is that the Swedish Democrats have neo-Nazi roots – which is not the case for the right-wing nationalists in its Nordic neighbours. SD has worked hard to distance itself from its past and has expelled its most compromised representatives. This has made it somewhat more acceptable to the Conservatives and Christian Democrats, but not the other parties who refuse any contact with SD. In public debate, Germany in 1933 is frequently evoked: first letting Hitler gain power, then losing democracy. The research of German-American scholar Jan-Werner Müller, who argues that European authoritarian parties have never won power without the support of the democratic political right, is influential. Others point to current examples (Hungary in particular) where a populist, right-wing party, once it wins power, takes effective control of the media and alters the rules in its favour.

The 73-Point Agreement

The agreement between Red-Green and the other two parties stipulates that the Centre Party and the Liberals are guaranteed complete access to all preparations, investigations, drafting and implementation of measures connected with issues covered in the agreement. Government budgets are to be prepared by the four parties together. The 73-point agreement has resulted in the establishment of more than 200 working groups involving all four parties. Unlike the 2014–18 Red-Green government, which relied on the parliamentary support of the Left, now the Left is completely left out. In the negotiations, Stefan Löfven even avoided being seen with Left Party leader Jonas Sjöstedt. The agreement says explicitly that the Left shall have no influence on policies during the coming four years, even though Löfven could form a government only by being able to count on the 28 votes of the Left Party.

After the agreement was struck, Löfven met with Sjöstedt to console him, and he promised that compromises negotiated with the Left between 2014 and 2018 would not be revoked. Sjöstedt afterward claimed that he has an agreement, on paper, which Löfven denies. Moreover, his ministers regularly assert that they will have no problem respecting the 73-point agreement “since it opens up new venues and possibilities.”

So how much of a right-wing agenda does this agreement have?

One obvious move to the right is abandoning efforts to limit profits of private health care, day care, elder care and publicly financed schools. Limiting such profits or even doing away with them altogether has been the goal of the Left Party – a goal which the Social Democrats and the Greens had worked to fulfill, although with mixed feelings.

Another obvious right-wing policy is doing away with the 5 per cent surtax on earnings. In addition, payroll taxes and taxes on small and medium-sized businesses will be lowered. Income tax deductions for services purchased by households are to be broadened. Add to this harmonization of taxes on wages and on pensions, which means lowering taxes on pensions. Social Democrats had argued against tax cuts altogether during the election campaign.

Labour market policies were a hot election issue. The Alliance had for many years advocated making it possible to pay lower wages (especially for the large number of immigrants) to stimulate job creation, as well as letting private employment agencies broaden their role at the expense of the State Labour Market Agency. Three provisions have a significant impact on the Social Democrats’ partnership with the labour movement:

• collective agreements need not apply when government-subsidized workers are hired;
• restrictions on firing workers will be eased; and
• to promote labour mobility, unemployment benefits are to become more generous in the short term and less generous in the long term (modelled on the Danish model of flexicurity).

However, it is stipulated that reforming labour market laws is to be handled by the trade unions and the employers’ associations, and only if they are unable to reach an agreement will the government step in. Here, and throughout the 73 points, the agreement evokes the “Swedish Model” under which labour market issues are left to the unions and employers.

Another big bloc of reforms is directed at deregulating the housing market, and here too the Social Democrats have made concessions.

Two specific election promises by the Social Democrats are included in the agreement: a “family week” (subsidized leave for parents taking care of their kids when there is no school or day care) and training to promote labour skills and mobility. Moreover, some more general commitments come at the insistence of the Social Democrats: for example, that unemployment insurance shall be “opened to more wage-earners,” and “income differences shall be lessened.” These may lead to conflicts down the road, especially when passing the annual budget. In the end, however, the Centre Party and the Liberals will not allow the Conservatives and Christian Democrats with the support of the Swedish Democrats to dictate the budget.

There are also points in the agreement that all the parties have advocated: increasing the incomes of seniors, strengthening defence, improving communication infrastructure and coming to grips with several environmental challenges. Climate is mentioned throughout the document, and treated as a priority along with jobs. The Greens were able to get many of their climate policy measures into the agreement, including a climate budget (carbon dioxide emission reductions are specified in time intervals for various sectors of society), a ban on new gasoline and diesel cars from 2030 so that Sweden will be CO₂-neutral by 2045 at the latest, and SEK 15 billion (USD 2 billion) in green taxes. The agreement demands that a climate budget and the ban on new gasoline and diesel cars also be adopted by the European Union, with CO₂ emissions induced by consumption (imports) included in the climate budget.

A controversial proposal to build high-speed rail between the three major cities in Sweden is endorsed in the agreement. This is something the Greens have advocated for a long time, though others are less enthusiastic because of the high cost (SEK 200–300 billion) and the small CO₂ reduction once CO₂ emissions from construction are included.

The Centre Party has traditionally had its roots in the countryside. Among the reforms aimed at strengthening work opportunities that favour the interests of farmers, the most controversial – over which there has been political disagreement for decades – is reducing shoreline protection, and therefore public access, to allow for more housing in desirable locations. The agreement also supports allowing the production and sale of wine and spirits at farms.

The agreement endorses the priorities of the educational objectives of the Liberals, who have been especially critical of Swedish schools for being too lenient and disorderly. These priorities include reintroducing grades in the early years of schooling, expanding the program that gives good teachers higher wages, concentrating learning on facts and banning mobile phones from the classroom. In addition, there would be a ban on new religious schools, with stricter control of those that already exist.

There is only brief treatment of immigration policies, the issue on which the Swedish Democrats were able to gain support. While it will become slightly easier for family members to obtain the right to asylum, the restrictions that were introduced after the large inflow of immigrants in 2015 are to be kept for two more years, with the question of a long-term policy for asylum seekers to be delegated to a special parliamentary commission.

The agreement includes a number of costly measures combined with tax reductions. Furthermore, it limits deficit financing and requires a small budgetary surplus over the business cycle. This means that not all promises will be kept. There will have to be compromises within the coalition – including several very tough ones – during the coming four years.

What Can Be Expected For The Next Four Years?

Beyond the specifics, the agreement raises a wider question. Could the new political constellation mean the end of the traditional bloc cleavage? There is much speculation, but no one really knows. Clearly, the Social Democrats and the Greens hope for lasting cooperation with the political middle, and are willing to make concessions to achieve this. The Centre Party seems satisfied with the ongoing cooperation over many, but not all, political questions, though its official position is to return to Alliance cooperation for the next election.

On the other hand the Liberals, the smaller of the middle parties, are deeply split. Though Liberal leader Jan Björklund succeeded in winning a two-thirds majority in the party for the 73-point deal, much opposition remains, and it was reflected in opinion polls that led Björklund to announce his resignation soon after the agreement. The Liberals face a period of uncertainty. Some push for a renewal of the Alliance with the Conservatives and Christian Democrats, with the support of opinion leaders on the right who regularly attack the two middle parties for having “left the bourgeois family.”

The Swedish Democrats do not share this goal. They have a clear vision: to form part of a new conservative bloc with the Conservatives and the Christian Democrats. So far those two parties have rejected the idea. But some within them, at least, are ready to explore different forms of cooperation.

The Left Party is in a difficult position. Between 2014 and 2018 it managed to exert significant influence, supporting the Red-Green government from the outside. Now there is another Red-Green government, with a clear liberal agenda. Even with the votes of the Centre Party and the Liberals, this government does not command a majority in the 349-seat Parliament, and it would be defeated if the Left, with its 28 seats, voted along with the 154 Conservatives, Christian Democrats and Swedish Democrats.

But it is difficult to find any issue on which the Left would vote with the right-wing bloc, or to think of the Left ousting a Social Democratic–led government, although Jonas Sjöstedt has indicated that possibility. This threat is a gesture by the Left Party leadership to calm the dissatisfaction among its rank-and-file who opposed any form of support for the liberal-leaning Red-Green government – similar to its abstention on the vote on Stefan Löfven as Prime Minister.

Nor is all to the satisfaction of the Social Democrats and Greens. More leftist Social Democrats have formed an association within the party, the Reformers, with the declared goal of defending and promoting traditional party positions. Radicals within the Greens have broken away from the party and created a new group, Turning-point.

In sum, there is no clear indication of the future political direction of Swedish politics. The 73-point agreement might be the beginning of a change to more flexible party strategies – or it could just be a short break before the traditional patterns of cooperation return. However, a rift in the Alliance over such vital issues as resolute climate action and immigration was apparent even before the 2018 election, and was only inconclusively masked during the election campaign. The rift indicates that continued cooperation in the middle is a strong possibility.

Social Democrats had to make many important concessions – too many, say some critics on the left. On the right, those who were ready to offer concessions to the populists failed to gain enough support for such a move. Social Democrats were able to form a government not dependent on the populists. This meant holding on to power, always important in Social Democratic thinking, but also keeping the populists out. In today’s Europe of surging populism, this is no small thing.

Notes

¹ See our Sweden is Still Waiting for a New Government, Inroads, Winter/Spring 2019.

² This development has been extensively covered in recent issues of Inroads. See, for example, our section on populism, immigration and Europe from Summer/Fall 2016, our section on populism and Russia from Winter/Spring 2017, and Reports from Europe from our Winter/Spring 2019 issue.

Olof Kleberg is former editor-in-chief of the regional daily newspaper Västerbottens-Kuriren in Umeå, a university city in northern Sweden. Richard Murray was chief economist for the Swedish Agency for Public Management and founder of the Stockholm Party, a local, green party.