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Swedish PM faces no-confidence vote, what happens now?

[June 18, 2021] STOCKHOLM (Reuters) - Swedish centre-left Prime Minister Stefan Lofven looks headed for defeat in a no-confidence vote on Monday after the formerly communist Left Party withdrew its support over plans to ease rent controls on new-build housing.

The motion of no-confidence was submitted to parliament on Thursday by the nationalist Sweden Democrats, and opposition parties with enough votes to oust Lofven quickly lined up to support it.

HOW DID WE GET HERE?

Social Democrat leader Lofven forged a minority government with the Greens after an inconclusive 2018 election. It was underpinned by a comprehensive cooperation agreement with former political foes, the Liberals and the Centre Party.

The so-called January agreement allowed Lofven to remain premier but also opened the way for key centre-right reforms, including more flexible labour laws and an easing of Sweden's rent control system.

The Left, though not part of the deal, tolerated the government to avoid a centre-right cabinet backed by the far-right Sweden Democrats. However, it said it would withdraw its tacit support if Lofven proceeded with rent control reforms, a key issue for many of its voters.

When that happened, the Sweden Democrats called the no-confidence vote. Together with the Moderates, the Christian Democrats and the Left, they have enough votes to topple Lofven's government. It would be the first time a Swedish premier is ousted by parliament.

WHAT HAPPENS NOW?

Lofven has the weekend to broker a deal to placate the Left. However, scrapping the rent control plans would be hard to swallow for his January agreement partners, which view the Left with deep suspicion.

If Lofven loses the vote he has two options: resigning and letting the speaker attempt to find a new premier supported by the existing parliament, or call a snap election. Without an election, the most likely outcome would still be a new Lofven cabinet given the composition of parliament.

Any centre-right government would depend on Sweden Democrat support. Cooperation with a party whose roots are in the white supremacist movement remains unacceptable for many parties.

Any snap election must be held within three months. It would be the first such vote since 1958 and polls suggest no block would win a clear majority. The next regular general election would still have to be held as planned in September 2022.

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Swedish Prime Minister Stefan Lofven leaves a meeting at the EU summit, in Brussels, Belgium, July 21, 2020. REUTERS/Johanna Geron/Pool/File Photo

WINNERS AND LOSERS

It is too early to call the result of Monday's vote but the Sweden Democrats appear to have won support for their plan, marking a further step in their move from pariah to the political mainstream.

While the Left's stand has support within the party, were the move to result in a centre-right government, criticism could quickly grow and leave them vulnerable in the next election.

The vote is a clear setback for Lofven. The January agreement was controversial even among his own voters, many saying he made too many concessions to the market-oriented Liberals and Centre Party. Many Social Democrat voters also oppose relaxing rent controls and the vote highlights how far to the right Lofven has had to lean to stay in power.

WHAT WILL THIS MEAN FOR POLICY?

Any snap election would likely focus on traditional centre-right issues such as law and order, and immigration. Sweden has been dogged by gang violence in recent years, with many blaming lax immigration rules and toothless law enforcement. Polls suggest voters have higher confidence in the centre-right on these issues.

However, the pandemic has also highlighted flaws in Sweden's cherished cradle-to-grave welfare system and the centre-left will be keen to focus in any election on moves to bolster education, healthcare and elderly care.

(Reporting by Johan Ahlander; editing by Niklas Pollard and Gareth Jones)

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