Left targets privatisation in Swedish election

Swedes do democracy the civilised way: over fika, their afternoon treat of coffee, cake and a chat. In Stockholm's Kulturhuset arts centre, members of a well-heeled crowd nurse their cups and listen attentively as political leaders make their pitch ahead of tomorrow's general election. The low-key event – no shouting, no interruptions – is less a debate than an audition for stewardship of Sweden's famed social model.

For decades this capitalism- socialism hybrid offered Swedes cradle-to-grave welfare and made the Social Democrats (SAP) the dominant force in postwar politics. Since losing office eight years ago they have looked on as the centre-right government of prime minister Fredrik Reinfeldt retooled the Swedish model like a political version of Ikea: still Nordic but unashamedly market-driven.

Lanky and sober, the shaven- headed Reinfeldt is the only centre-right leader ever re-elected in Sweden. His eight years have, he tells voters, been an era of successful economic management: a budget nearing the black and a 40 per cent public debt, half that of Germany’s. Non-euro Sweden weathered the financial crisis better than economies inside the currency bloc; famously high income tax rates have been reduced, along with corporate tax; and inheritance and property taxes were axed altogether. But the jobless rate has risen to 8 per cent, previously strong growth is slowing and the housing market shows signs of overheating.

Most damaging for the 49- year-old leader: a series of scandals that has dimmed Swedes’ appetite for his privatisation drive. Sensing an opportunity, the SAP-led opposition argues that the wheels are coming off privatisation and, like at car company Volvo, an overhaul is needed urgently.

At Stockholm’s Kulturhuset, politicians’ calm voices rise when talk turns to privatisations gone wrong: for-profit old-age homes with dismal conditions; and private-run schools and kindergartens where investors pocketed state subsidies yet still went bankrupt.

OECD report

The shock is still palpable from an OECD report last December that suggested Swedish school standards were slipping fast. The centre-left attacks on privatisation have left the government on the back foot, with Reinfeldt and his allies defending market choice but conceding mistakes and promising corrections.

“The result of privatisation has been catastrophic, our schools urgently need more teachers and resources,” said SAP leader Stefan Löfven. The 57-year-old former welder and union leader has neither government nor parliamentary experience – no harm, he says, for correcting given privatisation’s excesses.

His likely coalition allies, the Left Party and the Greens, have accused the government of using privatisation to help their friends feather their nests at taxpayer expense. “We don’t want people taking their children to school only to find a note on the door saying ‘closed due to bankruptcy’,” said Green Party co-spokesperson Asa Romson at the debate.

With the SAP and Left Party, polls put the centre-left on about 45 per cent, about four points ahead of Reinfeldt's four-party centre-right alliance.

Fragmented political landscape 
A similar result tomorrow would leave both camps short of a majority in an increasingly fragmented political landscape. SAP support has dropped a third in a decade to barely 30 per cent, its lowest level ever. A likely new entry to the Riksdag parliament, the Feminist Alliance (FI), would split the left's vote still further.

Things are a little better for the centre-right alliance led by Reinfeldt’s Moderate Party, thanks to the rise of the far-right Sweden Democrats (SD). It has shrugged off its neo-Nazi past and brazened out xenophobic controversies during the campaign to capitalise on immigration fatigue. Now it is on course to double its 2010 vote to more than 10 per cent.

At the radio debate Reinfeldt attacked SD leader Jimmie Akesson for presenting immigration as a drain on the Swedish economy. "Basically it comes down to what kind of society we want to live in," he said. "A society that sees a wealth in diversity . . . where we don't create insecurity, hate and suspicion between people because they don't look exactly like us."

Sensing power slipping away, outgoing finance minister Anders Borg – backed by Swedish business leaders – has warned voters that a new centre-left government would endanger prosperity by hiking taxes. The SAP has promised only minor fiscal adjustment and Borg's potential successor, Magdalena Andersson, is viewed as a fiscal moderate. For that reason analysts say centre-left promises of reviving the Swedish model are unlikely to roll back the clock or see any radical rethink on the EU stage.

“A change of government will bring no major change in Sweden’s relationship with Europe,” said Mikael Gilljam, a political scientist at Gothenburg University. “Mr Reinfeldt’s Moderates already pushed left and the Social Democrats return to power depend on shifting right to the political centre.”