Breakingviews – The election of Sweden shows that it is not the economy, stupid

LONDON (Reuters Breakingviews) – An exhortation to focus on "the economy, stupidity" is often cited for helping Bill Clinton win the presidency of the United States in 1992. This approach will not work for politicians Swedish people who hold an election on Sunday.

Support has increased for the Swedish Democrats, an anti-immigration party that, according to some polls, now enjoys the support of almost a fifth of voters. The main competitors insist that they will have nothing to do with it. But forming a stable coalition can be difficult because the Swedish Democrats have promised to bring down any government that fails to give its opinion on immigration policy.

In the United States and the United Kingdom, economists have pointed to declining blue-collar jobs and highlighted income inequality as factors contributing to political upheaval. Sweden is different. The country is growing faster than the whole of the European Union, as has been the case for much of the past two decades, and has one of the highest levels of inequality the weakest of the block, as shown by the Gini coefficient. The employment rate exceeded 77%, almost 10 percentage points higher than in the EU. The Nordic country has had budget surpluses since 2015 and the European Commission is expected to do so again this year and next year.

The concern over immigration has, however, gained prominence on the political agenda since 2015, when hundreds of thousands of people fleeing the war in Syria have arrived in the EU. That year, the number of asylum seekers in Sweden increased to 162,877, twice as many as in 2014 and nine times more than ten years ago. More than a fifth were unaccompanied minors that year, 10 times more than in 2005.

Admittedly, not all those who applied for asylum have been accepted and the number of refugees has since fallen back. However, in 2017, almost 19% of the Swedish population (10.1 million) was born outside the country, against 11% in 2000.

As in other EU countries, the growing popularity of Swedish Democrats has forced traditional parties to change their stance on immigration. Sweden has imposed restrictions on asylum seekers and the ruling Social Democrats have proposed to prohibit companies from offering work to third-country nationals unless they belong to sectors qualified as shortage of personnel. Swedish Democrats will shape politics even outside the government – despite the economy.