Sweden: Swedish Prime Minister calls for snap elections after losing budget vote
December 19, 2014
On 3 December, Sweden's Prime Minister Stefan Lofven called for snap elections to be held on 22 March after the far-right Sweden Democrats helped the center-right opposition lawmakers reject the government's budget proposal. This will be the first time since 1958 that the country will hold snap elections.
In last September’s vote, the anti-immigrant far-right Sweden Democrats gathered more than double the votes they received in the 2010 election, mainly as a result of rising hostility toward immigration. With 13% support and 49 seats in parliament, the Sweden Democrats are now the country’s third largest party behind the governing center-left Social Democrats and the opposition, the center-right Moderates.
In Sweden, each party can present its own budget proposal and the one that is backed by the most votes wins. The opposition has traditionally opted not to align behind a common alternative budget. This time, however, the Sweden Democrats decided to break with established tradition and vote with the center-right opposition instead of abstaining. As a result, the government’s budget was dismissed and the Prime Minister was forced to call a new vote just two months after taking office.
A week after campaigning started, opinion polls suggested that the snap March 2015 election is likely to leave Sweden with another minority coalition and that the main blocs will have to agree on a way forward. Both the center-left and the center-right coalitions have already announced that they will commit to denying the Sweden Democrats any influence over policy. However, how this will be engineered varies from bloc to bloc. The center-left government has called on the center-right coalition to cooperate in order to form a broad coalition and keep the Sweden Democrats isolated. The center-right has been dismissive of the offer. It has instead proposed striking a deal with the government on voting procedures in parliament to allow minority governments to rule and to prevent the Sweden Democrats from effectively holding veto power.
In addition to causing a period of political crisis, the snap March election means that the 2015 budget draft will not be approved until April at the earliest. This will most likely trigger further market uncertainty and negatively impact the Swedish economy going forward.
Author: Cecilia Simkievich, Economist