Sweden’s Contemporary History Part I
In a 1980 referendum, there was a 58.1% majority for the operation of up to 12 nuclear reactors over a 25-year period. The Government Fälldin was seated. But in 1981, the Moderates withdrew because they believed that the Center Party and the People’s Party did not follow up the coalition’s tax program. Fälldin continued as prime minister for a minority government until the 1982 elections, when the Social Democrats and Olof Palme took over again. The new government launched an economic crisis program. the krone was devalued by 16%. After moderate wage settlements in 1983, exports increased and inflation came under control. In return, Sweden experienced increased unemployment; at the end of 1983 it was 180,000. After the 1982 election, the Social Democrats introduced the disputed wage earners ‘ funds (wage earners’ fund; a form of capital savings that will give employees some influence on the company’s management and share of the dividend), despite strong opposition from the bourgeois parties and leaders in Swedish business.
On the night of March 1, 1986, Olof Palme was shot down and killed in Stockholm. The killing made a deep impression in Sweden and the rest of the world. Ingvar Carlsson took over as prime minister. In the wake of the Palme killings, Sweden was shaken by a number of political scandals, several related to the killing. First and foremost, the investigation into the killing was highly critical, and it has not been clarified. In 1987, one day it came to pass that the Swedish arms group Bofors through its subsidiary Nobel Kemi had been carrying out illegal arms exports. In part, the company had sold weapons to countries it was not allowed to sell Swedish weapons to, and partly there were allegations of corruption in connection with a major arms delivery to India. In 1988, it was revealed that a Swedish publisher, Ebbe Carlsson, had conducted private investigation into the Palme case with the approval of Swedish Justice Minister Anne-Greta Leijon. Leijon had to leave after Ebbe Carlsson was arrested in an attempt to smuggle in advanced monitoring equipment from abroad. But despite the scandals, the Swedish social democracy continued to have strong support for the population, and the party consolidated its position in the parliamentary elections in 1988. At this election, the Environmental Party de Gröna was represented for the first time in the Riksdag.
Sweden after 1990
In 1990, the Social Democratic government was blown up on the issue of wage cuts. Ingvar Carlsson returned with a new social democratic government, but the powerful finance minister Kjell-Olov Feldt(1982–90) declined. In 1991, the Social Democrats lost government power after the party made its worst election since 1928. The Moderates saw significant progress, while the Liberal Party and the Center Party declined. The environmental party came under the barrier and lost its representation, while two new parties came in: the Kristdemokratiska Samhällspartiet (from 1996 the Kristdemokraterna), which after many years under the barrier, gained more than seven percent, and the newly started protest party New Democracy. New Democracy gained 25 seats and was in the running for parliament, but unsurprisingly turned out to function poorly as a political party. Lack of party loyalty, personal contradictions and inner divisions led New Democracy to almost disintegrate and disappeared from Parliament in 1994.
The Moderate leader Carl Bildt sat with the government in the period 1991–94. Unlike the bourgeois cooperative governments in the 1970s, Bildt managed to keep the coalition together throughout the period. He also managed to maintain the high support for the Moderate Assembly Party. In the 1994 election, when the government had to step down, it was the three coalition partners who stepped back sharply: the Center Party made its worst election in fifty years in 1994, the Liberal Party’s second worst. The Christian Democrats received just over four percent of the vote.
The economic crisis reached its peak in 1992, with strong pressure against the Swedish krona and new dramatic tightening. The Swedish central bank raised interest rates on short-term loans several times, and in a short time it increased from 16 to 500 per cent. The Swedes stated the fixed krone exchange rate, and the krone fell immediately by approx. 9 percent. After six months, the value was approx. 20% below the level from November 1992. In return, interest rates stabilized. And the low krone exchange rate led to improved competitiveness.
After the 1994 elections, the Social Democrats returned to the government position, and the government of Ingvar Carlsson won a big victory when Sweden agreed to the EU in the referendum that autumn (see below). The new Finance Minister Göran Persson was given a key role in the government, along with Mona Sahlin, who was appointed Deputy Prime Minister and a sort of “throne” in the Social Democratic Party. The Social Democrats continued to build on the bourgeois government’s crisis policy, with emphasis on low inflation and economic growth over distribution policies and social reforms. Through a crisis settlement with the Center Party, the government received a majority for cuts in public spending such as child benefit and development aid, and taxes increased.