Sweden’s Lofven in Final Government Push Ahead of Budget Vote

(Bloomberg) -- Acting prime minister Stefan Lofven is running out of time in his bid to secure support for a new Social Democrat-led minority government ahead of a crucial budget vote that could see his conservative rivals shape Sweden’s economic policy in 2019.

Lofven was expected to brief parliament speaker Andreas Norlen about the status of the talks on Friday. Norlen, who is in charge of steering the government talks, has set a Monday deadline for deciding whether to announce a vote on a new administration. Such a vote would be held on Wednesday at the earliest.

All parties have submitted their own budget proposals, and unless Lofven succeeds in securing a workable coalition, lawmakers may end up picking the one submitted by the center-right Moderates and Christian Democrats. The nationalist Sweden Democrats have already signaled their support for the conservatives’ proposal, which envisages income tax cuts worth about 20 billion kronor ($2.2 billion).

After leading a center-left cabinet for the past four years, Lofven was forced to reach out to opposition parties as a result of the Sweden Democrats’ surge in September’s inconclusive election.

Lofven’s Red-Green coalition is currently in talks with two small allies of the Moderates, the Center Party and the Liberals, which are seeking lower income taxes and more flexibility in the labor and housing markets in return for their support.

Negotiations on a new government have dragged on for nearly three months following the Sept. 9 election. But with time running out for a budget to be approved before the Christmas break, the talks are fast approaching crunch time.

Lofven is scheduled to present a government solution to the speaker on Monday. An opinion poll this week showed increased support for the Social Democrats since the election, with the Sweden Democrats also gaining.

To contact the reporter on this story: Amanda Billner in Stockholm at abillner@bloomberg.net

To contact the editor responsible for this story: Nick Rigillo at nrigillo@bloomberg.net

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