Swedes Face Respite From Political Turmoil as Lofven Eyes Return

(Bloomberg) -- Sweden's caretaker prime minister, Stefan Lofven, said that he had secured enough support to form a new government and avoid snap elections, bringing some respite from the political turbulence that has rocked the Nordic region's largest economy in recent weeks.

Lofven, the leader of Sweden's Social Democrats, will seek to make his comeback in what is expected to be a knife-edge parliamentary vote on Wednesday.

“I was voted out a couple of weeks ago and the parties that were behind that have not been able to come up with a viable alternative,” Lofven, 63, said at a press conference in Stockholm on Monday. “The country needs a government that has the ability to act.”

Lofven's efforts to stage a return were given a boost earlier in the day when Center Party leader Annie Loof said her lawmakers would abstain. That appears to have denied the opposition the majority needed to block him from regaining the premiership.

Still, Wednesday's vote remains precarious and any reprieve from political volatility looks set to be temporary. At the present count, it would take just one lawmaker from the emerging coalition to jump ship for Lofven's effort to fail. A new Lofven government would stand on even shakier ground than the one formed after the 2018 election.

The Swedish currency was little changed after the announcement, trading at 10.143 kronor against the euro as of 4:08 p.m. in Stockholm.

Sweden's Premier Resigns and Warns Against Early Election

Lofven was forced to resign as prime minister after an unlikely alliance of former communists and conservative parties joined forces to oust him from power. The trigger was a government proposal to deregulate housing which prompted his former allies on the left to turn against him.

The Social Democrat said he now believes his government can propose a budget that can be passed in parliament, “though it requires that people don't lock themselves to their positions and demand to get 100% of what they want.”

A former union boss, Lofven has navigated Sweden's shifting political landscape by seeking alliances in the center, and has earned a reputation as a political Houdini by managing to survive seemingly intractable conflicts.

Yet his political dexterity has been challenged by the rise of the anti-immigration Sweden Democrats. Once seen largely as a stable two-horse race between a unified center-right and a bloc of left-leaning parties led by the Social Democrats, the country's political landscape has been upended by the nationalists, whose popularity makes coalition building far more unpredictable.