Sweden wakes up to a new reality

When the people of Sweden woke up on Monday morning, they faced a radically changed political landscape. To the Social Democrats, the party that defined modern Sweden, voters had handed the worst election result for nearly a century. For Fredrik Reinfeldt's centre-right Moderates these were the best results since full democracy was introduced. Yet this country that prides itself on tolerance and equality had also let in an anti-immigrant populist party, which now holds the balance of power in Sweden's parliament.

• Bodström slams Social Democrats over Mustafa (27 Apr 13)
• Party crumbled under pressure: Mustafa (23 Apr 13)
• Omar Mustafa and the Social Democrats (23 Apr 13)

The election of the Sweden Democrats was hardly a surprise - indeed, the election result was roughly in line with predictions. Yet the lack of a government with majority support in parliament has sent the political establishment into a spin, and threatens to overshadow the success of the centre-right parties, who may be forced to seek an uncomfortable accommodation with a reluctant Green Party.

Where the Sweden Democrats succeeded was in tapping into an undercurrent of resentment among some Swedes at large-scale immigration - some 14 percent of Sweden's population is composed of people with foreign backgrounds.

The party, with its young leader Jimmie Åkesson, ran a professional campaign and toned down some of its more extreme rhetoric about throwing immigrants out of the country. It also capitalized on the fact that it was shunned by the political and media establishment, using its underdog status to its advantage.

Only time will tell whether the Sweden Democrats prove to be a lasting force in Swedish politics (a previous populist party, Ny Demokrati, made similar gains in the 1991 election, only to disappear without trace three years later), but the eclipse of the Social Democrats might have longer-lasting consequences.

The party, which has ruled Sweden for 65 of the past 78 years and built up the Swedish model of a highly taxed state with generous welfare benefits, has seen its share of the vote fall to just 30.8 percent. The result is the worst for the party since 1914, and puts it at level pegging with the Moderates for the first time. Moreover, this was the second election the party had lost in a row. For the first time since the 1970s, the centre-right would rule for two terms.

The Social Democrats are the victims of Reinfeldt's shrewd realignment of the Moderates. Reinfeldt persuaded his party that Swedes were willing to move to the right, but not too fast or too far. In this, he made a similar calculation to Tony Blair and Bill Clinton - he identified the centre ground and appropriated his opposition's language in order to conquer it. He formed the Alliance for Sweden with centrist parties, and vowed to rule in genuine partnership.

For the New Moderates, tax cuts needed to target ordinary wage earners and reducing unemployment became top priority. Reinfeldt dubbed his party the ‘New workers' party', appropriating the name from the Social Democratic Workers' Party. The message to voters was that he wanted to overthrow the Social Democratic Party, but not the whole Social Democratic system.

Yet subtle though the changes were, Sweden has not simply replaced Social Democracy with ‘Social Democracy lite'. From having the highest taxes in the world, Sweden is heading rapidly towards the European average. From having the highest level of sick leave in Europe, the current government's tough approach has brought it down to more normal levels. The state pharmacy monopoly has been consigned to history and the governments holdings in many other companies have been sold off.

Conservative hard-liners might think Reinfeldt has not gone far enough - the top rate of income tax remains 58 percent, for instance - but Sweden has taken a clear rightward turn.

As members of Reinfeldt's Moderate Party gathered at a glitzy hotel in Stockholm for their election night party, they only had to look out of the window to the grandiose headquarters of the Social Democratic-linked union organization LO to remind themselves of the journey they had made. This iconic bastion of Social Democracy is now dwarfed by the steel and glass edifice in which smart-suited Moderates feted their historic victory.

The Sweden Democrats would provide a mammoth hangover on Monday, but that would not alter the fact that the Moderates have changed the course of Swedish politics - and the party knows it.

This article has previously been published in full on the Swedish debate website Newsmill.