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TO RUEHC/SECSTATE WASHDC IMMEDIATE 1093
INFO RUEHZL/EUROPEAN POLITICAL COLLECTIVE

C O N F I D E N T I A L SECTION 01 OF 02 STOCKHOLM 001501 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: DECL: 09/18/2016 
TAGS: PGOV PREL PINR SW
SUBJECT: SWEDEN'S ELECTIONS:  CENTER/RIGHT ALLIANCE FOR 
SWEDEN WINS 
 
REF: A. STOCKHOLM 1489 
 
     ¶B. STOCKHOLM 1421 
     ¶C. STOCKHOLM 952 
     ¶D. STOCKHOLM 913 
 
Classified By: Polcouns Casey Christensen, reason 1.4 (b) and (d). 
 
Summary 
------- 
¶1.  (c) Sweden voted Social Democrat Prime Minister Goran 
Persson out of office September 17, giving the mandate to 
Moderate Fredrik Reinfeldt and the center/right Alliance for 
Sweden.  Reinfeldt is the big winner, with his Moderate party 
earning a larger vote total than his three Alliance allies -- 
Liberal, Center, and Christian Democrat parties -- combined. 
Persson has submitted his resignation from the government, 
and said he will stand down as party leader in March. 
Reinfeldt's campaign focused on job issues and the economy, 
and we expect the first attentions of his government, which 
will be announced October 3, will be in the same direction. 
We expect the new government will seek positive Euro-Atlantic 
relations, while making no abrupt changes with the foreign 
policy of its predecessor.  End Summary. 
 
A Clean Sweep 
------------- 
¶2.  (c) Sweden has ousted the Social Democrat Prime Minister 
Persson and turned the government over to a coalition of 
center-right parties led by Prime Minister designate Fredrik 
Reinfeldt, the Moderate Party leader.  In September 17 
parliamentary elections, voters gave the Alliance for Sweden 
(consisting of the Moderate, Center, Liberal, and Christian 
Democrat parties) a total of 48.1 percent of the votes, 
versus 46.2 percent for the Social Democrats and their Green 
and Left supporters.  This will translate into 178 seats for 
the Alliance majority vs. 171 seats for the SDP, Left, and 
Greens in the Riksdag, Sweden's parliament.  Reinfeldt and 
his new cabinet of ministers will be formally announced 
October 3.  Jockeying is now underway among the Alliance 
parties for distribution of ministries.  The big winner in 
the government sweepstakes is expected to be the Moderate 
party, which garnered on its own 26.1 percent of the votes, 
compared with a total of 22 percent for its three alliance 
partners taken together (Center 7.9, Liberal 7.5, Christian 
Democrat 6.6).  Other then Reinfeldt's designation as the 
prospective Prime Minister, all ministries are under 
negotiation; the outcome may not be clear before the 
beginning of October. 
 
¶3.  (c) Prime Minister Persson suffered an historic loss, 
with the Social Democrats scoring their lowest percentage of 
votes (35.2 percent) since 1914.  Persson conceded defeat in 
the election and said he would step down as party leader at a 
special party congress to be called in March 2007 and turn 
the reins over to the next generation.  The succession battle 
has already begun, with calls for additional resignations 
from party leadership positions. 
 
¶4.  (c) Although Sweden's economy appears to be doing well, 
with growth above European averages and unemployment 
officially at 4.6 percent, Reinfeldt found a message on jobs 
that resonated with frustrated job seekers and concerned 
Swedes.  He demonstrated that real unemployment figures are 
much higher if standard methods for accounting for sick leave 
and job-training regimes are applied.  Reinfeldt called for 
reduced unemployment benefits, decreased payroll taxes for 
low-income workers, and tax breaks to businesses that hire 
the long-term unemployed, while assuring voters he would 
preserve the essentials of Sweden's popular welfare state. 
This gave the Moderates -- and the Alliance -- a boost among 
disillusioned job-seekers and others concerned about the 
sustainability of Sweden's welfare system.  Another key 
factor in the Alliance victory was dissatisfaction with PM 
Persson, who was often characterized as complacent, arrogant, 
and tired. 
 
¶5.  (u) Other than the Moderates, which made an unprecedented 
jump from 15.2 percent in the 2002 parliamentary elections to 
26.1 this time, and the Alliance parties riding their 
shirttails, there were no big winners.  The same seven 
parties will remain in the Riksdag, but with considerable 
shifts in the numbers.  The Liberal members of the Alliance 
for Sweden suffered a major setback, falling from 13.3 to 7.5 
percent.  Some of this can be attributed to a late-breaking 
scandal regarding Liberal party staffers hacking the Social 
Democrats internal web site.  Most of the Liberal votes 
appear to have gone, as we noted earlier (ref B), to the 
Moderates, and so were not much of a net loss for the 
Alliance.  The Christian Democrats declined from 9.1 to 6.6 
percent.  The Center party had a modest increase, from 6.1 to 
7.9 percent. 
 
 
STOCKHOLM 00001501  002 OF 002 
 
 
¶6.  (u) On the other side of the aisle, the Social Democrats 
were down from 39.8 to 35.2 percent, while the Left continued 
its intermittent decline, falling from 8.3 to 5.8 percent, 
compared with the 2002 election.  The Greens did especially 
well among young voters, rising modestly from 4.6 to 5.2 
percent of total votes. 
 
¶7.  (u) None of the small parties made it over the four 
percent threshold to enter parliament.  The nationalistic, 
anti-immigration Sweden Democrats earned, according to exit 
polls, about 2.0 percent of the vote, which would be a major 
gain for them.  In a few localities, they appear to have 
received figures as high as 20 percent.  (Note: official 
figures for the small parties will not be available until the 
20th.)  The Feminist Initiative appears to have garnered 
about one percent. 
 
Foreign Policy 
-------------- 
¶8.  (c) We expect that the fundamentals of bilateral 
relations following an Alliance victory will likely remain 
much the same in the short term.  We may hear a difference in 
tone, with less vocal criticism of U.S. foreign policy. 
Within the Alliance for Sweden, the Liberals (openly) and 
Moderate (circumspectly) support Sweden joining NATO, but 
call for a national consensus on the issue.  The Christian 
Democrats are agnostic on the issue and the Center Party is 
skeptical, but says it is amenable if the SDP also joined 
consensus. Eventually, if the political constellations line 
up (and this will take into account Afghanistan, where Sweden 
leads a PRT, and Iraq), there could be more open advocacy for 
NATO membership.  In Sweden's government, decisions on major 
issues are collective and taken by consensus of all 
ministers, including those whose portfolio does not relate to 
the issue at hand.  The Center party, which is now the 
second-largest in the Alliance for Sweden, has traditionally 
taken a foreign policy line very similar to that of the 
Social Democrats, whom it has supported in prior governments. 
 The section on foreign policy in the Alliance's joint 
program differs only in emphasis (more action on Darfur, and 
on democratizing Eastern Europe, for example), but not in 
essence from that of the Social Democrats.  Seismic shifts in 
Sweden's foreign policy are not likely in the short run. 
 
What Manner of Man 
------------------ 
9,  (c) Reinfeldt is, like his predecessor Persson, a 
pragmatist and a centrist.  By co-opting labor issues from 
the Social Democrats, he has pulled what amounts to a Tony 
Blair, but in reverse.  In contrast to the traditional 
Moderate party position, Reinfeldt and the "New Moderates" 
have promised not to dismantle the welfare state.  The Social 
Democrats grumbled throughout the campaign that Reinfeldt was 
simply claiming he would be a better social democrat than 
they were.  When we asked a group of prominent business 
leaders about Reinfeldt's approach, the shared opinion was 
that most of Sweden's parties -- including the "New 
Moderates" -- are really social democratic.  Reinfeldt has 
stated publicly that Bill Clinton is his favorite American 
politician and underscored this point to the Ambassador 
privately (ref C), adding that he had no problem with nearly 
all of the policies of Clinton, but disagreed with some of 
the foreign policy of the current administration. 
 
¶10.  (c) Reinfeldt is married and the father of three 
children.  He lives in a modestly upscale suburb of 
Stockholm.  He holds a degree in economics from Stockholm 
University, and speaks excellent English.  An updated bio 
will follow. 
WOOD