Olof Palme, the last Social Democrat to enjoy a full majority

Today Stefan Löfven, a former industrial welder from northern Sweden, expects to begin moves to assemble a Social Democrat-led government. As the latest in a long line of Social Democrat prime ministers, Löfven assumes not just the trappings of power but an office of both party and state that defined Sweden for the latter part of the 20th century. But the party that led Sweden through its golden age of economic and social prosperity after the Second World War and made the country a role-model across Europe and the wider world is not in good shape.

It used to be said the Social Democrats were in control even in opposition. Now the question is whether they are in control when they are in government. In coalition with the Greens, they no longer have the ability to lead and make others follow. When former Social Democrat leader Göran Persson left office in 2006, Sweden still possessed many of its Nordic economic and social features, from a monopoly on the nation’s chemists to extremely high levels of sick-pay eligibility and a relatively protected public healthcare system. In the past eight years many of the old certainties have vanished, and the country the Social Democrats should inherit is, for the first time in over half a century,  not a land for which they have written the rules.

Since 2006 Sweden has been led by the conservative-liberal ‘Alliance for Sweden’, a joint front of the Moderate, Christian Democrat, Liberal and Centre parties. By far the biggest partner in the coalition were the rebranded ‘New’ Moderates, who successfully overhauled Swedish conservatism under the leadership of Prime Minister Fredrik Reinfeldt and proved a big influence on David Cameron’s reinvented British Conservative party.

Elected on a promise to safeguard the Swedish model,  the Alliance for Sweden have fundamentally changed key aspects of the Swedish system. Since the 1950s the country has been famous for extremely high levels of employee protection, gender and economic equality and a robust economy that has weathered global trends.

Since 2006 the expansion of profit-driven free schools has increased educational division, and tax cuts for both the wealthy and the restaurant sector, intended to stimulate employment, have had little impact on the overall prosperity of the country. Combined with an affordable housing crisis in Stockholm and well-publicized scandals involving private healthcare companies, the Moderates look set to limp over the finish line with just two-thirds of the support they won at the previous election.

The complex maths generated by Sweden’s combination of open national lists and a 4% barrier for entry to parliament means that a likely Social Democrat-Green coalition could horse trade with the Left, Liberal and Centre parties to form a majority. Unfortunately for Löfven, the Feminists failed to make it past the finish line, robbing them of a natural ally. Traditionally Sweden has operated as two electoral blocs, with the Social Democrat-dominated left competing with what Swedes label ‘bourgeois’ parties in coalition.

The difficulty for either side in assembling a complete majority has been created by the entry of the far-right Sweden Democrats. The party, which first appeared in 2010 and is rooted in neo-Nazism, was vying with the Greens to become the third largest in national politics, comprehensively pushed them into third place. Both the Greens and the Sweden Democrats had consistently hovered at around 10%, with the Greens promoting their ability to keep the far right from influence to no avail. The Sweden Democrats hit 13% though, making themselves kingmakers if anyone would be willing to work with them.  For now though, unlike in neighbouring Norway where the strongly anti-immigration Progress Party is in a governing coalition, the Sweden Democrats remain political outcasts.

What is happening in Sweden mirrors the fragmentation of European politics more generally, with voters abandoning traditional Social Democratic and Conservative parties in favour of newer voices on both left and right.  In the recent European elections the Greens beat the Moderates into third place, whilst the grassroots Feminists mobilised largely young and female voters to win an MEP. More worryingly for the traditional blocs, the far-right have been able to take votes from both conservatives and white working class voters.

The changed nature of Swedish politics means that a return to pre-Alliance days is firmly out of the question,  and the time when the Social Democrats would haul in upwards of 40% of the vote and make small concessions to other parties are long gone. It also means that the Swedish model so admired by Sweden’s European neighbours is on shaky ground even without the Alliance at the helm.

Government without overwhelming support leaves the Social Democrats with an existential question. Outflanked on the progressive left by Feminists and Greens, but unable to move further right without hemorrhaging their core support, they remain comfortably the largest party but without a clear vision of why they want to be in office. At a time when Sweden’s problems with social exclusion and income distribution risk removing it from the realms of Scandinavia and dumping it firmly within the demographic trends of the rest of Western Europe, Löfven will lead a group with the smallest percentage of Social Democrat MPs since the 1920s.  His government needs to revive the Social Democratic project and make it relevant for the 21st century if the party and the society they created are to survive.