Sweden plunged into political chaos as PM loses no-confidence vote

The sticking point is the Sweden Democrats -- an anti-immigrant party. Even though they get a big share of the vote, no-one else wants to coalition with them

Stockholm: Sweden’s Prime Minister Stefan Lofven has become the first head of government in the country’s history to lose office through a no-confidence vote.

The vote in Parliament toppled his minority coalition and plunged the largest Nordic economy into political chaos.

It is the latest sign that Swedish politics have been fundamentally altered since the rise of the anti-immigration Sweden Democrats.

Lofven says he’ll now talk to his allies to figure out whether he can still patch together a viable coalition. Failing that, he may call a snap election, he said.

It would be the first time since 1958 that Sweden would need to head to the polls earlier than planned.

If Lofven resigns, the speaker of Parliament will ask the biggest parties to try to form a new government until scheduled elections take place next year.

The Prime Minister’s fate seemed sealed after he refused to back down from a deregulation plan aimed at the rental housing market. The gambit by the Social Democrat who’s presided over a fragile minority coalition since inconclusive elections in 2018, angered the Left Party, who said he had crossed a red line.

The Left then won support from a group of conservative and nationalist parties, eager to eject their political foe. On Monday, 181 of the 349 MPs voted against Lofven.

His party has just under a fifth of the seats in Parliament, preventing either bloc from reaching an outright majority. That reality has prompted parties to the right to agree to consider working with the Sweden Democrats, once deemed too xenophobic for the mainstream.

Carl Bildt, a former Swedish foreign minister, was quick to note the historic nature of Lofven’s defenestration. He becomes the first head of government in the country’s history to lose office through a no-confidence vote.

During the pandemic, Sweden garnered international attention for its decision to resist lockdowns and leave most schools, businesses and restaurants open.

But political instability has yet to spill over to its economy, according to Johanna Jeansson of Bloomberg Economics. “Confidence in Sweden’s economic outlook is stronger than confidence for the government,” she said.

“We expect the ongoing recovery to continue as the pandemic eases its grip at home and in Swedish export markets,” Jeansson said.

But Finance Minister Magdalena Andersson voiced her concerns, and pointed to the need for stability on the way out of the pandemic.

“A political crisis is not good in this economic situation,” she told reporters in Stockholm. “We are just beginning an economic recovery and a lot of businesses are considering whether to hire, whether to invest and there is a risk that those decisions will be postponed as a consequence of the political uncertainty.”

Lofven, a 63-year-old former union leader and welder, has spent the past 2½ years in a coalition that looked shaky from the start. His Social Democrats governed together with the Greens, and could only stay in power as long as they were backed by the Left Party, the Centre Party and the Liberals, who agree on few key pieces of legislation.

Until today, the Prime Minister had survived seemingly intractable conflicts, and emerged victorious from previous no-confidence motions brought against him. His removal from office now sets the stage for an uncertain political future in Sweden. If the country holds an early election, it’s far from clear that the next government will be much more stable.

“It took four months to form a government after the last election and forming a new one will not be an easy task,” said Daniel Bergvall, an economist at SEB. “An extra election will most probably not create a clear outcome either.”