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POLITICS

ANALYSIS: Löfven’s return as Swedish PM carries ‘high price’ for all

The four-party deal struck on Friday that would allow Stefan Löfven to remain Sweden’s prime minister will require serious concessions on all sides, Swedish media from across the political spectrum wrote on Saturday.

ANALYSIS: Löfven’s return as Swedish PM carries ‘high price’ for all
A tentative deal to return Stefan Löfven to the PM's office has its critics on the right and left. Photo: Pontus Lundahl/TT
On Friday, Centre Party leader Annie Lööf confirmed that her party – together with the Green Party and Liberals – had struck a deal with the Social Democrats which would allow Löfven to stay on as prime minister.
 
 
As the Swedish media awaited formal confirmation of the deal, attention turned to analyzing the plan’s winners and losers. 
 
Svenska Dagbladet said the proposed deal would mark the end of the center-right Alliance, which consists of the Moderate Party, Liberal Party, Centre Party and the Christian Democrats. In an editorial entitled ‘The Alliance for Sweden (2004-2019)’, the centre-right outlet declared the tentative deal a clear victory for Löfven’s centre-left Social Democrats (S). 
 
“Although the S crowd cried crocodile tears when the settlement became known, very few of them are advocating for S to instead go into opposition. Power is still power,” its editors wrote. 
 
Svenska Dagbladet also wrote that the collapse of the Alliance can also be seen as a victory for the anti-immigration Sweden Democrats (SD). The Centre and Liberals refused to back a government made up of their centre-right allies, the Moderates and Christian Democrats, due to the fact it would rely on support from the far-right SD.
 
“Without SD’s presence, the Alliance probably would have survived. The Centre Party has chosen to give them a victory trophy,” the paper wrote. 
 
 
While the paper wrote that Centre and the Liberals could look forward to some of the right-of-centre policies they’ve championed, their policy gains will fall short of “what a united Alliance could have accomplished”.
 
The more left-leaning Aftonbladet also appeared to be skeptical of the deal. The paper's editors wrote that the Social Democrats would have to pay too large a price to stay in power because of the concessions demanded by Centre and the Liberals. 
 
Aftonbladet called the distribution of the parties’ varying priorities “lousy”, pointing to labour law reforms championed by C and L, a weakening of the a-kassa system and the abolishment of rent controls on new properties.
 
The centre-right Dagens Nyheter was more positive about the deal, saying that Lööf’s decision to instruct her party to abstain in a vote on Löfven as PM, thus offering its so-called ‘passive support’, was her best and only choice. The newspaper’s editorial board had previously predicted and expressed its support for the current deal. 
 
“If Lööf had chosen [Moderate leader Ulf] Kristersson [as PM], she would have received [Sweden Democrat leader Jimmie] Åkesson in the bargain. That was never imaginable,” DN wrote. It pointed to the labour law and rental market reforms as clear wins for the centre-right parties. 
 
Göteborgs Posten, which also tilts to the centre-right, wrote that it was optimistic that the new government solution would be “somewhat better” than the previous Löfven government but cautioned that the new constellation was likely to be ineffective because contrary to the four parties’ attempt to present a somewhat united front, there is actually no middle-of-the-road solution but merely “a sprawling constellation with dramatic differences in ideology, whose ability to bring about crucial systemic changes will be very small”.

POLITICS

Full steam ahead for Swedish economy in new three-part budget bill

Sweden has won the fight against inflation and expects GDP to grow next year, Finance Minister Elisabeth Svantesson proudly proclaimed as she presented the government's budget bill for 2025.

Full steam ahead for Swedish economy in new three-part budget bill

“Going forward, the task will be to ensure that high inflation does not return, and at the same time to implement reforms and investments that build a more prosperous, safer and more secure Sweden for generations to come,” said Svantesson in a statement on Thursday morning.

The government predicts that Swedish GDP will grow 2.5 percent next year followed by 3.2 percent 2026.

Unemployment, however, is expected to remain unchanged at 8.3 percent in 2025, only beginning to drop in 2026 (7.9 percent, according to the government’s predictions, followed by 7.6 percent in 2027).

Svantesson told a press conference that a strong focus on economic growth would create jobs.

The 2025 budget, worked out in collaboration between the right-wing government coalition and far-right Sweden Democrats, is far more expansionary than the restrained budget Svantesson presented last year when Sweden was still fighting high inflation: 60 billion kronor towards new reforms rather than 39 billion kronor for 2024. Almost half, 27 billion kronor, will go towards funding lower taxes.

ANALYSIS:

Svantesson highlighted three areas in which new reforms are prioritised:

  • Strengthening household purchasing power after several years of the high cost of living putting a strain on household budgets, with reforms set to push the tax burden to its lowest level since 1980, according to the government.
  • Reinstating the “work first” principle, meaning that people should work rather than live on benefits. Some of the measures include language training for parents born abroad and increasing the number of places in vocational adult education.
  • Increasing growth, focusing on investments in research, infrastructure and electricity supply.

In the debate in parliament on Thursday, the centre-left opposition is expected to criticise the government for lowering taxes for high earners and not investing enough in welfare. 

Investments in healthcare, social care and education are significantly reduced in this budget compared to last year: down from 16 billion kronor to 7.5 billion kronor. 

Meanwhile, the hike of the employment tax credit (jobbskatteavdraget) – a tax reduction given to people who pay tax on their job income – is expected to lead to a 3,671 kronor tax cut for people on the median salary of 462,000 kronor per year.

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