Sweden
Domestic affairs into the 1990s
In the election of 1970 the Social Democrats lost the absolute majority they had held since 1968. But in spite of this the Social Democratic government of Olof Palme, with the support of the Communists, continued in office until the election of 1976, when the nonsocialist parties won a majority. Palme's resignation brought an end to 44 years of Social Democratic domination.
Nonsocialists formed governments from 1976 to 1982, the first coalition being led by Thorbjörn Fälldin (Centre Party). His government felt repercussions of the international economic crisis of the 1970s, manifested in unemployment and adverse effects on the standard of living. Political discussion, however, focused above all on the question of nuclear power. Fälldin, who had campaigned for the cessation of building nuclear power plants, was forced to compromise on this issue. As a result he resigned in October 1978. Ola Ullsten, leader of the Liberal Party (also called the People's Party), succeeded him as prime minister, forming a minority government in which one-third of the ministers were women. Following a general election in 1979, the nonsocialist coalition led by Fälldin was returned to office.
The development of nuclear power continued to be a hotly debated issue; in a national referendum in 1980, 58 percent of the voters endorsed the use of not more than 12 nuclear reactors at four plants, which, however, were to be used until they could be replaced by other energy sources or until 2010 at the latest.
Through the 1980s, political debate focused on economic problems, including in particular those related to escalating inflation, an unfavourable international trade balance, and unemployment. These problems grew more severe as a result of worldwide changes in the methods of processing raw materials and industrial production that developed from the beginning of the 1970s. Changes of this kind created economic difficulties throughout Sweden's industrial complex, including such major sectors as textile manufacturing, iron- and steelmaking, shipbuilding, and mining. Escalating unemployment generated by the economic downturn was especially significant during 1980-83 and at the beginning of the 1990s.
Unemployment became a central issue of the 1982 parliamentary elections, along with the deficit and a proposal by the Social Democrats to establish a wage-earner investment fund. The Social Democrats won a resounding victory in the elections, and a new government was formed by Olof Palme. The elections signaled a new polarization of Swedish politics, with the Conservative Party gaining a significant number of new seats in the Riksdag, while the Liberals lost almost half of their representation.
The new government quickly took strong steps to alleviate the nation's economic stagnation, including an increase in the value-added tax (VAT) and a sharp decrease in the value of the krona. Simultaneously, pressures were brought to bear on employers to resist workers' demands for higher wages to offset the resulting price increases. Signs of recovery began to appear in response to the government's measures and also as a result of the improving international economic scene in 1983-84. Taxation rose to a very high level, however, as a result of the large budget deficit and rapidly growing employment in the public sector. At the same time, a controversial issue developed over the legislation for the wage-earner investment fund that the Social Democrats and the Communists had managed to push through the Riksdag in late 1983, in spite of unified resistance from the nonsocialist parties and the business community. The opposing groups feared that the legislation would move Sweden too heavily in the direction of socialism. After their implementation the employee funds appeared not to affect the economic system in any appreciable way. Although they suffered some losses, the socialist parties continued to hold a majority of the seats in the Riksdag after the 1985 election. The most significant outcome of the election was a strong advance by the Liberal Party, which had come under new leadership.
Prime Minister Olof Palme was assassinated by a gunman on Feb. 28, 1986, leaving the Swedish nation stunned and in shock, there having been little precedent for such political violence for almost two centuries. Motives for the assassination remain obscure. Palme was replaced by his deputy prime minister, Ingvar Carlsson, who, although a less dynamic figure, followed the same political philosophy as Palme. Little change occurred in the government with the succession of Carlsson. There was, however, a notable lessening of public debate over foreign policy, and without Palme Sweden's role in the arena of international politics, where it had championed human rights and promoted peace and disarmament, was diminished.
The general election of 1988 did not change the political picture to any great extent. The most notable event was that the Green Ecology Party secured 5.5 percent of the vote and thus passed the 4 percent minimum required to enter parliament. All of the established parties lost a few seats each without any significant change in their relative strength. The domestic policy of the Social Democratic government, which remained in office, was characterized by concessions toward a more liberal program carried through with the support of the Liberal Party. For example, there was a considerable reduction in direct taxes on income, and a program was developed for an energy policy for the future.
The general election in September 1991 resulted in a major change in Swedish politics. The main victor in this election was the Moderate Party (also called the Conservative Party), under the leadership of Carl Bildt. The Moderates received 22.1 percent of the vote and took 80 seats in the Riksdag, while the Social Democrats lost 18 seats. As a result, the nonsocialist parties controlled 170 seats (not a majority) against only 154 for the Social Democrats and the Left Party (the former Communist Party) together. In reaction to the election Prime Minister Carlsson immediately resigned, and a nonsocialist coalition government was formed by Bildt. Sweden's deteriorating economic conditions had caused about one-third of the electorate to switch its vote to the nonsocialist parties. Bildt had campaigned on a platform of directing Sweden's economy away from socialism and toward a free-market system. He wasted little time in proposing measures to achieve that goal, including the privatization of state-owned companies, cutting taxes and government spending, and lifting restrictions on foreign ownership of Swedish companies.
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