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Sweden: A Precarious Government Agreement on the Line

Sweden is once again in a political gridlock. The minority government led by social democratic Prime Minister Stefan Löfven (S-S&D)—scrubbled together in 2019 after hard and long political squabbling—came to a fall on 21 June 2021: a passed motion of no confidence tabled over a rental housing market deregulation brought it down. The fall of the government has got the ball rolling towards great political uncertainty with parties switching sides in the system of bloc-politics, a risk of MPs rebelling and possible snap elections. Löfven looks nevertheless to be pulling it off and forming his third government coalition

A Precarious Coalition

After months of stalemate following the 2018 election, the Social Democrats’ (S-S&D) leader Löfven managed to form a minority government with the Greens (MP-G/EFA) that relied on confidence and supply support from two liberal parties: Centre Party (C-RE) and Liberals (L-RE). This coalition—also known as the January Agreement—was historic in that the traditional centre-right block known as the ‘Alliance’ consisting of the two liberal parties—the centre-right Moderates (M-EPP) and Christian Democrats (KD-EPP)—fell apart. Reason behind the Alliance’s downfall and the newly formed odd coalition was the wish of S, MP, C and L to isolate the national-conservative Sweden Democrats (SD-ECR) from power.

The January Agreement parties, however, assembled together only 167 of 349 seats in the Swedish parliament: eight short of an absolute majority of 175. But by pressuring the Left Party (V-LEFT) to abstain in the confidence vote, together with C and L. The result came to be 116 MPs voting for confidence, 79 abstentions and 154 no confidence. Despite more MPs having no confidence in the government than MPs who do, Löfven was approved as prime minister. This is possible thanks to Sweden’s system of negative parliamentarism in which governments solely need to prevent an absolute majority having no confidence in it.

V’s abstention was remarkable because the party was not included as part of the government coalition agreement. Furthermore, C and L managed to negotiate a clause stating that any cooperation by the government with V, as with SD, was ruled out. V’s parliamentary votes were also unnecessary for the government to have its budget approved. In Sweden each party has to present a budget alone or together with others and the budget with plurality support in parliament is approved. Considering the low chance of V ever supporting a budget from the opposition on the right or vice versa, the January Agreement parties’ budgets received a plurality and passed.

However, V gave away two red lines of their own in supporting Löfven. One was that if newly built homes were to be exempted from rent control V would table a motion of no confidence, enabling the fall of the precarious government agreement in place should the deregulation ever happen. Even though the government parties S and MP are against this deregulation, the parties still started the process of enforcing it pressured by the two other January Agreement parties C and L in the summer of 2021. V reacted by giving out an ultimatum of 48 hours to the government to drop this plan. The government did not back down and V announced their will to let it fall in a motion of no confidence.

An Ultimatum That Set the Ball Rolling

Long the expectations were that the situation would not go so far to a confidence vote since V has an insufficient number of seats to table such a motion needing help from M or KD. These parties are in favour of the planned reform and supporting a motion of no confidence would mean its annulment. SD bypassed this problem by tabling the motion themselves. Despite the attempt by the January Agreement parties to open for some sort of renegotiations on the reform, V together with M, KD and SD voted no confidence against the government on 21 June 2021. In total 181 MPs, more than the 175 needed, voted to oust Löfven who hereby became the first ever Swedish prime minister defeated in a motion of no confidence.

Löfven had a week upon him to either call snap elections or resign and let the formation of a new government start. Since Sweden has fixed term legislatures it means that even if snap elections in late 2021 were to be held, the elections scheduled for September 2022 remain in place. A newly elected parliament would thus sit for only less than a year. Furthermore, opinion polls show no great numbers for S and coalition partner MP could fail to achieve the threshold of four per cent needed to enter the parliament. This would possibly lead to a majority for M, SD and KD enabling a change in government. With these considerations, Löfven decided to resign and continue in caretaker status giving the speaker of parliament the mandate to initiate a government formation. The speaker has four attempts to present a candidate for prime minister. After four rejected attempts, snap elections are called automatically.

Forming a third government will be challenging but plausible for Löfven. The Centre Party may have given up on the rental housing market reform and thereby support by abstention from the Left Party could be regathered. So in theory, S and MP can form a new government with support from C and V as these parties assemble together a majority of one seat. This is why Löfven is firstly nominated by the speaker of parliament as candidate for prime minister. But the other liberal January Agreement party L made clear after the motion of no confidence they no longer will support a Löfven government as a party or negotiate a budget with him—a u-turn that opens the door to allying with the Sweden Democrats.

For Löfven now to pass a budget—assuming L is indeed out of considerations—active support from V is needed or else the right-wing opposition can pass its alternative budget instead. Löfven already made clear he is ready to form a government already now and then resign later again or even call snap elections if his budget were to fail. V announced they will support Löfven but still rule out voting for a budget they have no influence over. Meanwhile, C—that actually wanted to form a grand coalition government with both S and M—also announced their support for a third Löfven government. But the party ruled out any budgetary negotiations with V and made a policy demand on forest ownership that is unacceptable to MP.

A Razor-Thin Majority—If at All

Alternatively, for M-leader Ulf Kristersson to form a government on the right is even more challenging. The parties that are willing to support him—KD, SD and L—assemble together 174 seats, one seat short of a majority. The only way for him to become prime minister is if only one Member of Parliament is absent from S, C, V and Miljöpartiet that would vote against him assembling the magic number of 175 seats. This means that only 174 MPs would vote against Kristersson, one less than what is needed to prevent him from being approved. S even let their minister of agriculture resign and retake her seat as MP because her substitute might have been absent during a vote on Kristersson.

Because parliamentary arithmetic is so close, the impact of only one MP rebelling is great. Within C, there is one MP who voted against Löfven back in 2019. Despite saying she intends to stick to her party’s line this time, there is always a chance she could rebel again nonetheless. And within L—a party deeply split over whether to open the door to SD—has a potential of MPs possibly rebelling who vote against Kristersson. They could even vote in favour of Löfven providing him more space / another way to form a government or pass his budget. There is additionally one MP who earlier split from V and is the one who would provide a majority of one seat to make Löfven prime minister again. Even though she supported him in previous confidence votes, she has not yet decided how to vote in a pending vote on Löfven.

Löfven is expected to succeed in forming his third coalition government, with S and MP voting in favour of the government and C, V and possibly part of L abstaining from voting against it, enabling the formation to pass.

Solving a political gridlock for Prime Minister Löfven is nothing new. He has handled so many difficult situations before that he is given the nickname ‘master negotiator’. However, this time is extra tweaky with L switching sides, individual MPs causing uncertainty, parties ruling each other out and a threat of snap elections in the air. Furthermore, if Löfven manages to form a new government—which is most likely—it is unclear whether it will survive the end of the year. And all this happens with parliamentary elections on the horizon scheduled anyway for September next year.

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