Theme: Sweden’s election

Tough negotiations to form a government 

Sweden is approaching an exciting parliamentary election on September 11. The political situation is new in many ways, public opinion is evenly divided and the outcome is hard to predict. Neither the current majority nor the opposition consists of parties that are fully prepared to join the same government or even cooperate on budgets. Whatever the outcome, the election will thus probably be followed by lengthy negotiations before a new government is in place. New written accords along the lines of the previous January Agreement can be expected. Yet given the stability of Swedish public finances, a political risk premium is unlikely. Neither election promises nor proposals about the fiscal policy framework are expected to have a decisive macroeconomic impact.

Still two political blocks – but they have changed

Sweden still has two main political blocs, but they have changed. Although the leaders of the Social Democrats (S) and the Moderates (M), Magdalena Andersson and Ulf Kristersson respectively, are still the clear prime ministerial candidates for each side, the situation within the blocs is different from before. They include both new parties and new internal contradictions. Forming governments has recently become a lengthy process from a Swedish perspective, and the exercise of power has been complicated by weak parliamentary support.

For example, this has meant that during some periods the government has run Sweden based on opposition budgets, a phenomenon that until a few years ago seemed almost impossible. In just such a budgetary situation, when the Centre Party (C) allowed Magdalena Andersson to become prime minister last autumn but did not support her government's budget, the Green Party (MP) chose to quit the government. Since then, the country has had a single-party Social Democratic government. Recently, C has signalled a further rapprochement to S by saying it is willing to join an S-led government after the elections, albeit with some reservations. The former Alliance (M+KD+L+C) that governed Sweden between 2006 and 2014 is thus definitely a closed chapter.

The Moderate-led opposition has been re-joined by the Liberals (L) and has clearer links with the right-wing populist Sweden Democrats (SD). Sweden’s two blocs thus again enjoy roughly equal popular support, ensuring an exciting election with an uncertain outcome.

Can voter trust, the 4 per cent parliamentary threshold or policy issues decide the election? One advantage for the government is that PM Andersson is the party leader who enjoys by far the highest level of trust among voters. She is the only one who regularly exceeds 50 per cent in such surveys. Second place is a dead heat between Ulf Kristersson (M), Ebba Busch (KD) and Jimmie Åkesson (SD) at around 40 per cent. In a situation where both international and domestic conditions feel uncertain, the issue of voter trust may become important. On the other hand, the party leaders who will have to form the basis for an S-led government (V, MP and C) are at the bottom in voter trust polls.