STOCKHOLM (Reuters) - The center-right Alliance faces a tough task to form a government that can keep a previously powerless far-right party from influencing Sweden’s traditionally liberal politics.
The Alliance of the Moderates, Liberals, the Christian Democrats and the Center parties has 172 seats in the 349-member parliament, just short of a majority, after Sunday’s election.
The question now is whether the Alliance can persuade one of the parties in the opposition bloc to cooperate or whether it will run Sweden as a minority administration, giving the far-right the potential to play a spoiler role in parliament.
Prime Minister Fredrik Reinfeldt said he would ask the Green Party for help in forming a government. His coalition went to the polls promising to focus on shoring up the welfare state after four years of cutting income taxes.
“I hope for a good response,” Reinfeldt said.
Green Party spokeswoman Maria Wetterstrand said the opposition bloc remained united.
Sweden has a long history of minority governments — the Alliance was the first majority administration in 25 years — and analysts think the Alliance could govern alone and bring on board different parties on individual bills.
But it would then be at risk of falling to a vote of no confidence should the opposition of the Social Democrats, Left and Green parties be backed by the Sweden Democrats, whose main platform is to drastically cut immigration.
Financial markets have already given a foretaste of how such a solution would be greeted with the Swedish currency being quoted lower overnight.
“The impact will be a weaker crown, but probably long-term rates may also rise a bit,” said Annika Winsth, economist at Nordea. “A minority government is a risk, and that is quite simply the price that we will pay.”
The crown was being quoted at 9.2440 per euro after the result had been announced, weaker than the 9.2230 before polls closed on Sunday night.
While Reinfeldt struggles with forming a government, all the major political parties have to come to terms with the far-right’s new status in a country that has prided itself for decades on offering a haven to refugees.
Left Party leader Lars Ohly blamed the demise of Europe’s traditional welfare model and extreme disparities of wealth across the continent for voters’ frustration.
“We have seen it in our Nordic neighbors, we have seen it in Holland, Belgium,” he said. “I think a lot of people are looking for a simple solution — to blame someone, immigrants and immigration.”
But despite four years of trimming back benefits, Sweden’s welfare state remains one of the most comprehensive in the world. Furthermore, the country’s economy is growing fast, public finances are robust and unemployment, though high after the recent global economic crisis, is coming down.
Jimmie Akesson, leader of the Sweden Democrats, said his party was not targeting immigrants but Sweden’s failed immigration policies. He said he was ready to negotiate with and cooperate with all the other parties.
“We are not going to cause problems. We will be responsible. That’s my promise to the Swedish people,” said Akesson.
Both major blocs have said they would not work with the Sweden Democrats.