Although still wealthy, Swedes punished the ruling party and rewarded extremists in the elections

Sweden emerged from the recession much faster than others – with a deficit of 2.1 percent and an expected growth of 4.5 percent. Despite this, it shocked the world by giving 20 mandates to the extreme, pro-fascist party. For now, no one can form a majority government, nor answer the question of why wealthy Swedes are angry.

Written by: Vanja Figenwald
[email protected]

Everyone has heard of the phenomenon known as the arrogance of the wealthy at some point in their lives, but many did not know what it actually looks like. A perfect example of this was last week’s Swedish parliamentary elections, a brilliant illustration of a situation where you are doing so well that you actually do not know what to do, but you know that you should do something. In a country that is doing great while others are suffocating in recession or barely crawling out of it, people decided on two very interesting things. First, to slightly reduce the ruling center-right coalition’s previous majority in parliament, as a reward for successfully leading the country, and second, to give a little push to the extreme right, fascistoid party ironically named the Swedish Democrats. The latter entered parliament for the first time in history and received 20 mandates out of a total of 349 seats in the Swedish parliament. Thanks to the strange logic of the electorate, Sweden found itself in quite an awkward situation: it cannot easily form a ruling majority, but potentially a minority government. The Alliance, a four-party coalition, remained the strongest political force and won the elections, but has 49 percent of the votes, insufficient for the 178 mandates needed for a majority. On the other hand, the red-green coalition received the trust of 45 percent of voters who turned out for the elections, which left the ‘Democrats’ with enough votes to blackmail both sides in case they attempt to form a majority government.

Thus, the ruling coalition needs just a few mandates, seemingly unattainable, but according to the latest information, they have no intention of forming a coalition with the ‘Democrats’. Looking at such a significant success of the radical right party, one might think that the country is drowning in a sea of Asians, Balkans, blacks, Turks, Kurds, and others, but immigrants make up 14 percent of the population, only about two percent more than the average in Northern Europe. As part of the increasingly common folklore, particularly highlighted in traditionally tolerant countries of Northern Europe, the ‘Democrats’ openly use anti-Muslim political rhetoric, calling Islam ‘un-Swedish’. It cannot be said that the statement is not accurate because Islam is indeed ‘un-Swedish’, just as Christianity is very un-Iranian or un-Chinese… This insightful observation by the ‘Democrats’ likely attracted an unprecedented number of Swedes to this political option.

The end of a political era
The outgoing Prime Minister Fredrik Reinfeldt, after the announcement of the results, tried to woo the Greens, but they rejected the possibility of changing political friends, probably grumbling to themselves that this is not yet Croatia. Such principledness means that it will be very difficult, if not impossible, to establish a stable government with a majority in parliament, which is why the first next option is a minority government led by the current Prime Minister Reinfeldt. Since the media almost unanimously rejected the possibility of any coalition with the ‘Democrats’, a minority government or new elections are the only options on the table. As another political curiosity, it may not be out of place to mention the protests organized against the electoral results of the ‘Democrats’, which is indeed interesting in terms of political theory. Protesting against the democratically expressed political will of one’s fellow citizens seems somewhat, to paraphrase the Swedish Democrats, ‘undemocratic’. Nevertheless, the media in Sweden, as well as around the world, declared the end of a political era in that country after the results were announced. The Social Democrats, who have been accustomed to power for most of the past hundred years, suffered their worst defeat since 1914. The Svenska Dagbladet newspaper effectively described the elections in three points: the right without a majority, crumbling social democracy, and the extreme right as a desirable suitor.

Stumbles in crisis
Today a model of a successful economy amid recession, Sweden has not avoided stumbles. As an exceptionally open economy where about half of GDP is tied to foreign trade in one way or another, it felt significant turbulence and ended last year with a GDP decline of approximately five percent. This year, however, the story should be quite different. Growth is expected in the range of last year’s decline, of about 4.5 percent, one of the smallest deficits in the European Union (with predictions of a surplus for next year), and the central bank has even started raising interest rates. The lessons learned in the 90s, when Sweden had to rescue its banks just as other countries have recently done, have clearly been learned, so a new bubble did not reoccur. Another reason that many analysts cite as a mitigating circumstance is the decision not to enter the eurozone, which proved beneficial during the crisis when the fall of the crown allowed for cheaper exports. Meanwhile, the Swedish currency (since the end of June) has risen by 10 percent and has become the second-best currency after the Australian dollar in competition among 16 global currencies according to Bloomberg’s ranking. The impression is that Sweden has gone through everything that others are experiencing before and faster. Besides relatively well-prepared banks, the country quickly resorted to fiscal stimuli, but also quickly withdrew them, while others were still debating whether to do so or not. The same applies to cuts and tax relief: a lesson learned, resulting in a budget deficit of 2.1 percent and an expected growth of 4.5 percent. To this list of achievements can be added the ridiculous public debt of 40 percent of GDP.

Youth without jobs
The latest global competitiveness list from the World Economic Forum placed Sweden in second place, behind Switzerland, but the relatively high unemployment rate of about eight percent is likely partially a result of this jump of two places compared to last year, skipping Singapore and the USA. The group most affected is the youth, of whom as much as 25 percent cannot find a job. Another reason for good positioning on the global map of investors is something that can be characterized as completely un-Swedish – the abolition of taxes on the wealthy, once levied on assets above a certain value. If Reinfeldt remains true to his announcements, lower taxes could benefit everyone else as well since the income tax is expected to be reduced by 2.1 billion dollars by 2015. Considering all of the above, it is indeed not easy to understand the electoral results that ‘punish’ the ruling party and ‘reward’ the extremists.