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World Business Intelligence

Economic, Financial and
Political Analysis from New York

SWEDEN
26/04/06 Intelligence Brief
FORECAST FOR THE NATIONAL ELECTION 2006
RIKSDAG
ELECTION
2002:

Below please find the final result for the Riksdag election. The figures comprise the whole country.
Name of party Percentage* Difference from
last election

No of seats
Moderate Party
(M)
15, 2 % - 7, 7 % 55 (5)**
Centre Party
(C)
6, 1 % + 1, 1 % 22 (6)**
Liberal Party
(FP)
13, 3 % + 8, 7 % 48 (4)**
Christian Democrats
(KD)
9, 1 % - 2, 6 % 33 (4)**
Social Democrats
(S)
39, 8 % + 3, 5 % 144 (2)**
Left Party
(V)
8, 3 % - 3, 6 % 30 (17)**
Green Party
(MP)
4, 6 % + 0, 1 % 17 (11)**
Norrbotten
County Party
(NBP)
0, 2 % -- --
Other parties
(OVR)
2, 8 % + 0, 3 % --
* The results are given with one decimal, which creates a discrepancy of 0, 6 %.
** of which adjustment seats
Election participation: 80, 1 % (-1, 3 %)
Number of the ones entitled to vote (Riksdag election): 6 722 152

EP
ELECTION
2004:

Summary of the final results of the Swedish election to the European Parliament held on June 13, 2004.
Name of party Percentage No of votes No of seats Difference last EP election
Moderate Party
(M)
18,25 % 458 398 4 -1
Centre Party
(C)
6,26 % 157 258 1 0
Liberal Party
(FP)
9,86 % 247 750 2 -1
Christian Democrats
(KD)
5,68 % 142 704 1 -1
Social Democrats
(S)
24,56 % 616 963 5 -1
Left Party
(V)
12,79 % 321 344 2 -1
Green Party
(MP)
5,96 % 149 603 1 -1
June List
(JL)
14,47 % 363 472 3 +3
Sweden Democrats
(SD)
1,13 % 28 303 -- --
Other parties
(OVR)
1,05 % 26 274 -- --
Election participation: 37,85 % (2 584 464)
Number of persons entitled to vote: 6 827 870


POLITICAL: Since the Swedes turned the Euro currency down in a referendum in September 2003, EU politics have become more polarized.
Most political parties have experienced internal splits over their European policies, with the result that members and supporters are likely to react with apathy and drive the turnout further down in the last European Parliament elections.
Sweden was surprised when the turnout in the 1999-European elections was as low as 37,85% - much lower than in national elections.
The centre-left Swedish Social Democrats are presenting a very pro-EU face in the last European Parliament elections with no-one critical of the EU placed high enough to have a chance of getting elected.
But half the social democrat supporters are opposed to the Euro, so the ruling party risks losing out to a combination of apathy and anti-EU parties.
Leader of the Social Democratic Party and prime minister since 1996, Goran Persson has kept a firm grip on his government and on most policy issues. However, his popularity ratings plummeted in early 2005, following severe public criticism of the government's handling of the Asian tsunami disaster. Just over a half a year before the next election, combined support for Goran Persson's minority government and its allies, the Left and Green parties, is at its lowest for a decade.
Goran Hagglund faced an unenviable task when he succeeded Alf Svensson as leader of the Christian Democrats in April 2004. Svensson had been at the helm since 1973, and was very popular with large parts of the electorate. Hagglund, in contrast, was virtually unknown to the public when he took charge. Politically, Hagglund's leadership has so far been characterized by continuity. He is firmly committed to the four-party opposition bloc and its attempt to unseat the government at the 2006 election. However, he has found it difficult to establish himself with the public, and the party remains dangerously close to the 4% representational threshold.


FINANCIAL: Sweden has weathered the global economic turndown comparatively well and continues to outpace the Eurozone. GDP growth is around 3.3% in 2005. Open unemployment is now at 5.5%, lower than many European countries. In Sweden taxes are higher, benefits more generous, and the labor market more highly regulated than in many EU countries. The Central Bank is independent.

Timber, pulp and paper, iron ore, copper and uranium has provided the basis for Swedish economic growth since the 1920s. Success in manufacturing then followed, with companies such as Volvo, Saab, Electrolux and Ericsson becoming internationally known household names.
Nowdays Sweden is making progress in the IT sector. PC and mobile phone ownership are all among the highest per capita in Europe.
The Internet revolution created a new generation of entrepreneurs in the late 1990s, and this is already having an impact on the Swedish economy. Mainly, based in the Stockholm metropolitan region, graduates who just a few years ago would have chosen a job in one of the leading Swedish multinationals are taking advantage of the opportunities created by the Internet. This has created a cluster of information technology (IT) companies, making Stockholm one of the leading locations for IT business worldwide. This trend, which has created a large number of millionaires in a relatively brief period of time, represents a break with the past, when high incomes and personal wealth were seen as irreconcilable with the social welfare state.
The Swedish government owns 43,5% of TeliaSonera. The semi-state owned company has big business interests in Russia; the company owns 44% of Megafon, Russia's third-largest mobile operator. Nevertheless, TeliaSonera might have to sell its stake and leave Russian telecom market when Christian Democrats will be elected to Riksdag in 2006. This has been threatened by Maria Larsson, the first vice-chairman of the party. Larsson claimed that the SEK 700 million, which TeliaSonera paid has ended up not with the Russian state as it should have. Christian Democrats admit that any evidence of wrongdoing on the part of the Swedish government or TeliaSonera could not be found, but they openly admit that they have been helped by people close to Russian Alfa Group. "We have asked them to assist us in collecting some of the public documents," - said Maria Larsson.

Additionally, the idea of privatization of state property with which Christian Democrats run in the elections of 2006 is posing most danger for the economy of Sweden.

 

EXECUTIVE SUMMARY: Generally the political parties that are said to be against the European Union get higher results in the European parliamentary elections than they get in the elections to the Swedish parliament. This is why Left Party and Greens got a significantly higher percentage in the European elections. There is also a tendency to punish the parties in government. Both these reasons account for the poor performance of Social Democrats.
In the 2002 election, in order to win over Social Democrats, Moderate Party suggested a coalitional government between Liberal Party, Christian Democrats and Center Party with a grand allowing them to form a minority coalition government. This proposal collapsed because of differing opinions among the parties.
Social Democrats suggested a coalition between Left Party and Green Party with a grand allowing them to create a majority coalitional government. This proposal collapsed because the party's leader Goran Persson refused to give Left Party or Green Party any minister posts.
The disadvantage of coalitional governments is that occasionally the parties involved may conflict on many issues. The advantage of such coalitions is that when they come to certain agreements; they are unlikely to be overruled.



Copyright 2006 by
S.J. Rundt & Associates, Inc.



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