The resignation of Swedish Prime Minister Stefan Lofven brings the largest Nordic economy a step closer to its first-ever female prime minister, and with it the task of fixing an ailing political system.
Lofven unexpectedly announced in a Sunday speech that he would step down in November after seven years in power and also quit as the leader of Social Democrats, which dominated Swedish politics for the past century. His minority coalition faced an autumn struggle to pass next year’s budget and the prospect of a defeat from the conservative-nationalist opposition in next year’s elections.
His obvious heir is the Harvard-educated Swedish Minister for Finance Magdalena Andersson, who has held the reins of the Swedish economy throughout the COVID-19 pandemic. A staunch advocate of fiscal prudence, she was criticized by economists before the COVID-19 crisis for building up unnecessary surpluses as public debt shrank to historically low levels.
Photo: AFP
“If she wants to, I believe she will be nominated and the question is then if she’ll be appointed in unity and with a strong mandate by the congress,” Gothenburg University political science professor Ulf Bjereld said.
Lofven, the great political survivor, came to represent the impasse that Sweden found itself in. The Swedish economy has been among the most resilient to the pandemic thanks to prudent public finances, yet Swedish society struggled to deal with an open-door policy that strained its generous welfare state and stoked anti-immigrant sentiment.
A new leader for the Social Democrats is to be elected at the party congress starting on Nov. 3 and whoever is chosen would become prime minister if confirmed by parliament. While Andersson is the frontrunner, other candidates include Minister for Digital Development Anders Ygeman and Minister of the Interior Mikael Damberg.
A precedent of women leading governments has already been set in the Nordics so that aspect is unsurprising. Norway, Denmark, Finland and Iceland are now run by women.
As for Andersson, she declined to comment on the political situation. Her spokesman said she was busy preparing the budget.
Earlier this year, she became the first woman to chair the International Monetary and Financial Committee, the main advisory body to the Washington-based IMF.
What is less clear is how markets would react to the latest Swedish twist. In the recent past, stocks and bonds have been impervious to political shenanigans.
“In a situation where we have strong government finances and very low interest rates, I do not think politics and the autumn budget will have a particularly large market impact,” Hans Sterte, the deputy CEO of Alecta, one of Sweden’s largest pension managers, said in an e-mailed response to Bloomberg questions.
The markets “should at least keep one eye on” the coming year in the Swedish politics, said Jens Peter Sorensen, chief analyst at Danske Bank A/S.
“The government’s budget runs a big risk of not being accepted by the Riksdag, and the New PM might have to govern on the opposition’s budget, not a smooth start in office, but also what Lofven on occasions has been forced/accepted to do,” he said. “That precarious risk underlines the fragile situation for the government that has become even weaker after the political turmoil this summer,” he said.
The bigger question is where Sweden goes from here and how it builds toward a more sustainable future that is not punctured by all-to-frequent government collapses and political paralysis. The Social Democrats currently control about a third of the seats in parliament in partnership with the Green Party.
However, the reality is that the government’s handling of the pandemic and the rise in the polls of the Swedish Democrats, whose roots date to the neo-Nazi movements, have taken a toll on the electorate. Their popularity demanded a change of tack that eventually precipitated the end of Lofven, a political career too linked to the past.
The Social Democrats, credited with a generous welfare state paid by some of the world’s highest income taxes, are also a party that owes its political success to an industrial backbone that no longer exists. If the budget does not pass, or if there is another misjudged step, Sweden could face its first snap elections since 1958.
SUPPORT: Elon Musk’s backing for the far-right AfD is also an implicit rebuke of center-right Christian Democratic Union leader Friedrich Merz, who is leading polls German Chancellor Olaf Scholz took a swipe at Elon Musk over his political judgement, escalating a spat between the German government and the world’s richest person. Scholz, speaking to reporters in Berlin on Friday, was asked about a post Musk made on his X platform earlier the same day asserting that only the far-right Alternative for Germany (AfD) party “can save Germany.” “We have freedom of speech, and that also applies to multi-billionaires,” Scholz said alongside Estonian Prime Minister Kristen Michal. “But freedom of speech also means that you can say things that are not right and do not contain
FREEDOM NO MORE: Today, protests in Macau are just a memory after Beijing launched measures over the past few years that chilled free speech A decade ago, the elegant cobblestone streets of Macau’s Tap Seac Square were jam-packed with people clamouring for change and government accountability — the high-water mark for the former Portuguese colony’s political awakening. Now as Macau prepares to mark the 25th anniversary of its handover to China tomorrow, the territory’s democracy movement is all but over and the protests of 2014 no more than a memory. “Macau’s civil society is relatively docile and obedient, that’s the truth,” said Au Kam-san (歐錦新), 67, a schoolteacher who became one of Macau’s longest-serving pro-democracy legislators. “But if that were totally true, we wouldn’t
Two US Navy pilots were shot down yesterday over the Red Sea in an apparent “friendly fire” incident, the US military said, marking the most serious incident to threaten troops in over a year of US targeting Yemen’s Houthi rebels. Both pilots were recovered alive after ejecting from their stricken aircraft, with one sustaining minor injuries. However, the shootdown underlines just how dangerous the Red Sea corridor has become over the ongoing attacks on shipping by the Iranian-backed Houthis despite US and European military coalitions patrolling the area. The US military had conducted airstrikes targeting Yemen’s Houthi rebels at the
MILITANTS TARGETED: The US said its forces had killed an IS leader in Deir Ezzor, as it increased its activities in the region following al-Assad’s overthrow Washington is scrapping a long-standing reward for the arrest of Syria’s new leader, a senior US diplomat said on Friday following “positive messages” from a first meeting that included a promise to fight terrorism. Barbara Leaf, Washington’s top diplomat for the Middle East, made the comments after her meeting with Ahmed al-Sharaa in Damascus — the first formal mission to Syria’s capital by US diplomats since the early days of Syria’s civil war. The lightning offensive that toppled former Syrian president Bashar al-Assad on Dec. 8 was led by the Muslim Hayat Tahrir al-Sham (HTS), which is rooted in al-Qaeda’s
RSS