Swedish PM Faces Ouster as Lawmakers Prepare Confidence Vote

(Bloomberg) -- Prime Minister Stefan Lofven is likely to be voted out in a confidence vote on Tuesday as Sweden’s establishment is deadlocked in its process to form a new government after a surge in nationalist support.

The 349-person legislature reconvened on Monday two weeks after a national election that saw big gains for the nationalist Sweden Democrats and Lofven’s coalition hang on to a one-seat lead over the center-right Alliance opposition. Parliament will hold a confidence vote on Lofven 9:30 a.m. on Tuesday.

Swedish PM Faces Ouster as Lawmakers Prepare Confidence Vote

The Alliance on Monday used its majority with the Sweden Democrats to elect a member of the conservative Moderate Party as the new speaker. The speaker, Anders Norlen, will decide on who will get the first try at forming a government.

After the confidence vote, he will hold talks with all the parties to gauge who will be best placed to form a coalition to steer the largest Nordic economy. He said it’s important for the speaker to stand above party politics.

Part of the consideration will be if a proposed coalition has enough support to pass a budget bill. “I will give that a lot of thought before a government formation," he said at a press conference Monday.

Right now, none of the sides have enough support to pass a spending plan. The Alliance remains divided on whether to seek further support from the nationalists, with the smaller Center and Liberal parties opposed to cooperating with the bloc of nationalist lawmakers. The Moderates and Christian Democrats are open to passive support.

Both the Sweden Democrats and the Social Democrats are now working to divide the Alliance, seeking either a smaller right-wing government or a broader bipartisan coalition.

The Liberal and Center parties are pushing for an Alliance government that has backing from the Social Democrats, but that has so far been shot down by Lofven’s group.

Breaking Promises

The premier has so far refused to resign, pointing to his lead over the Alliance. While both sides of the establishment have refused to work with the Sweden Democrats, the situation could start to shift as the stakes grow.

Swedish PM Faces Ouster as Lawmakers Prepare Confidence Vote

Daniel Suhonen, head of the left-wing think-tank Katalys, said he has no doubt that the Alliance is "definitely going to grab" its chance in ending the Social Democrat’s dominance.

“Lofven knows that in the end it’s going to be a right-leaning government, but he’s making it more costly for the Alliance parties by not stepping down voluntarily,” he said. “They’re going to break their promises to not rule with the support of the Sweden Democrats.”

Rounds Ahead

Moderates Party leader Ulf Kristersson has excluded outright negotiations with the nationalists but hasn’t rejected relying on their support. It’s important now to keep a “cool head,” Kristersson said on Monday. He emphasized he was “completely focused” on an alliance government.

Liberal leader Jan Bjorklund on Monday reiterated that there won’t be an Alliance government that relies on the Sweden Democrats.

“It’s fully possible that Ulf Kristersson could get a majority in the PM vote,” he said. “But two months later you have to get a budget through parliament and that isn’t possible without negotiating with the Sweden Democrats. That’s the problem and that is something that we won’t do."

The Liberals instead want to see negotiations between the blocs in order to find support for an Alliance government, Bjorklund said.

Center Party leader Annie Loof said it would be a “surprise” if the Social Democrats closed the door to talks. “We are in a difficult parliamentary situation,” she said after the speaker vote on Monday.

Ruled Out

Government talks can go four rounds of speaker recommendations, but Sweden has always found a solution in the first attempt. It’s likely to go beyond round one this time. The margin is razor thin and the Sweden Democrats have vowed that it will need to have influence to back a government.

The party has already been successful in shifting the Swedish debate and could win further concessions on tightening immigration, according to Ann-Cathrin Jungar, an associate professor at Sodertorn University who specializes in the European far-right.

Ahead of the election, the party also excluded its most extreme members and may now go further in trying to become a “normal” party, she said. But none of the blocs can count on its support, she said.

Not Impossible

Oscar Sjostedt, the economic policy spokesman for the Sweden Democrats, told Bloomberg on Monday that the party doesn’t have a problem with holding another election but sees the chance as “quite low”

It would find it hard to allow an Alliance government unless they offer something palatable and would vote against Lofven in the confidence vote, he said. It’s “not impossible” that we end up with a Moderate and Christian Democrat government, Sjostedt said.

”Maybe we wouldn’t vote for, but we would at least not vote against,” he said. “The likelihood that we wouldn’t vote is much bigger with such a constellation.”

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