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Election verifies the rise of Swedish nationalists
Sweden held general parliamentary elections on Sunday, and preliminary results confirmed a big change in the political landscape from liberal ideals toward a more nationalist, populist agenda.
The Social Democratic party, Sweden's largest party whose ideals have dominated Swedish politics for most of the last 100 years, got their weakest result since 1908.
This is significant; one could describe the founding fathers of the modern Swedish society as Social Democrats, and Sweden stands as the model case of the Nordic welfare state.
The biggest winner of this election were the Sweden Democrats, a populist party whose program has a strong focus on nationalism and social conservatism. They have been able to rally people who fear immigrant crime and oppose a change in the national fabric of Swedish society.
The party also wants to hold a referendum on Sweden's European Union membership along the lines of the Brexit vote in the U.K. Despite a clear victory, Sweden Democrats seem to have gained less than one-fifth of votes and remain the third-largest party.
Swedish government has traditionally been run by a Social Democrat-led centre-left coalition or a centre-right coalition including a number of parties. Victory for the Sweden Democrats means that neither of these blocks got anything close to a parliamentary majority.
All traditional parties have shunned cooperation with Sweden Democrats, which makes the government formation unusually difficult. Meanwhile, next-door in Finland, the populist True Finns party was included in the center-right government in 2016.
Since then, the party has split into two groups and lost popularity. Taking responsibility comes with a price for most populists, but this does not seem to be the way for Sweden.
The head of the Sweden Democrats, Jimmie Åkesson, has tried to cleanse the party of its far-right thuggish roots, but they still differ from their Finnish cousins with a more openly xenophobic past, which makes them less acceptable partners for mainstream parties.
Whatever parties the new Swedish government will include, the government has to seek parliamentary support outside its own base and take the populist agenda more seriously.
The rise of Sweden Democrats has not been obvious to the establishment; otherwise, the phenomenon would have been taken more seriously. After all, the rise of populist parties is old news in Europe. There is one crucial difference with Sweden: Populism is rising despite of strong economic performance and good employment.
Granted, the fall of national icons like Saab cars has left some disappointed and forced to look for new jobs, but consumer confidence is high, and trust in national institutions is solid compared to most other countries.
There are other reasons for disappointment among Swedes, like hours spent languishing in national health-care queues. Most importantly, a huge number of refugees were admitted in 2016, and demographic change has been visible for decades already.
Nearly one in four inhabitants of Sweden has either been born abroad or has been born in Sweden to two parents who themselves have both been born abroad. Most of them are well-integrated, but crime committed by immigrants was one of the major themes of the general election.
According to the most recent official survey from 2005, foreign-born Swedes are more than twice as likely to be suspects in criminal investigations. Immigrants are usually younger and less educated, however, and controlling for these factors, statistics show that there is no clear evidence of major cultural criminal tendencies.
Crime rates in Sweden are very low, but the country has fallen in some international safety rankings like the Global Peace Index. Statistics do not convince everyone, and many think that the government and ruling political elite in general have not been adequately tough on crime.
Sweden is an old democracy, and people's trust to the system is deep-rooted. Voters on Sunday did not doubt the Nordic welfare model, but many hesitate to let more immigrants without similar cultural traits share the system.
Parents have been happy to let their children to play outside without need for constant oversight, but a shadow of caution has grown. The coming weeks will reveal who runs the government, but Sweden Democrats are very unlikely to enter the government or make a big difference to economic policies.
Crucially, their rise is a reminder that people long for security in a time of change. Mainstream parties need to have a clear message how they supply security and how they suppress gang violence, even if they also want to steer clear from an openly xenophobic agenda.
The recent fall in the value of the kroner, Sweden's currency, partly reflects the investor fear that Swedish politics would come to a stalemate.
Pasi Kuoppamäki is the chief economist of Danske Bank A/S Finland branch. He is also currently a visiting scholar at Wilson Center in Washington, D.C.