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POLITICS

Stefan Löfven resigns as Prime Minister of Sweden

Stefan Löfven has handed in his resignation as Prime Minister, an expected move after he stepped down as leader of the Social Democrats last week.

Stefan Löfven resigns as Prime Minister of Sweden
Outgoing Prime Minister Stefan Löfven and parliamentary speaker Andreas Norlén. Photo: Anders Wiklund/TT

Television cameras filmed Löfven handing his resignation letter to the speaker of parliament, Andreas Norlén.

“Well, here we are again,” he said as he and Norlén sat down for a Swedish fika – coffee and biscuits.

Andersson, who is currently Finance Minister, was elected to replace Löfven as party leader of the Social Democrats at the party’s congress last week, putting her on track to become the country’s first woman Prime Minister if she wins a vote in parliament.

No date has been set for that vote yet.

In Sweden’s parliament, political forces are so finely balanced that the Social Democrats need the support of both their Green Party coalition partners and the Left and Centre parties to elect a new Prime Minister.

The Centre Party on Wednesday said it would back Andersson, but the Left Party has not yet confirmed what it’s going to do.

The act of installing the first woman prime minister sounds almost anachronistic in a country that has long championed gender equality. All other Nordic countries – Norway, Denmark, Finland and Iceland – have all seen women lead their governments.

The change at the head of the Social Democrats comes as the party hovers close to its lowest-ever approval ratings with elections less than a year away, in September 2022.

The right-wing opposition, led by the conservative Moderates, has in recent years inched closer to the anti-immigration Sweden Democrats and hopes to govern with its informal backing.

‘Tight’ election seen

After being confirmed as party leader last week, Andersson, a former junior swimming champion often described as a “pragmatic” politician, outlined three political priorities for the coming years.

She said she wanted to “take back democratic control of schools, healthcare and elderly care”, in a country that has long had a debate over welfare sector liberalisation and privatisation and companies being able to profit from taxpayer money.

She also said she aimed to make Sweden a leader in the climate transition and become a role model for the world.

However, it remains to be seen how much change Andersson will be able to bring to the Social Democrats.

“Magdalena Andersson has worked closely together with Löfven for seven years. I expect no major changes,” Anders Sannerstedt, political science professor at Lund University, told AFP.

“The Social Democrats need to come up with some new policy ideas” if they want to win the election, he said.

But “Andersson is more a technocratic bureaucrat than a visionary creative leader. Time will tell.”

He predicted the general election would be a “very tight race”.

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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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