Jessica Gow | Afp | Getty Images Sweden’s Prime Minister Magdalena Andersson conceded defeat in the country’s hard-fought election, clearing the way for the far-right Sweden Democrats and allied parties to try to form a government. The centre-left Social Democrats, led by Anderson, took 30.3% of the vote, confirming its position as the country’s largest party with almost all votes counted. However, the centre-left parties – the Social Democrats, along with three others – failed to win a majority in Sweden’s 349-seat parliament, or Riksdag. Instead, a right-wing group of parties, led by Ulf Kristersson’s center-right Moderates, appears to have won a narrow majority of seats and will have the first chance to form a government. This so-called “blue bloc” includes the anti-immigration Sweden Democrats. The party, once shunned by the political establishment, recorded its best electoral result with 20.5% of the vote. It represents a historic turning point in Swedish politics. The Sweden Democrats are now on the verge of gaining influence in government policy. The nationalist party campaigned on law and order issues after a rise in gun violence and has pledged to impose longer prison sentences and reduce immigration. Sweden, a Scandinavian country of around 10.5 million people, has a reputation for being one of the most progressive nations in Europe and consistently ranks among the happiest nations in the world.

Andersson worries about the coming years

Speaking at a news conference on Wednesday, Anderson announced her intention to step down and said the right-wing bloc of parties had a one- or two-seat advantage. “It’s a slim majority, but it’s a majority.” “Most polls told us it was going to be a close election, so I wasn’t surprised it went that way and not the other way around,” Anderson said. “I knew this could happen, but of course I’m concerned about how the development will be in the next few years.” Andersson became Sweden’s first female prime minister last year and led the country’s historic bid to join NATO after Russia’s invasion of Ukraine. He has criticized the growing popularity of the Sweden Democrats, warning that having such a party in government could have major effects on the tone of political debate. Jimmy Akesson, leader of the Sweden Democrats, said his party would be a “constructive and driving force” in rebuilding security in the country, Sky News reported. He added that it is “time to put Sweden first”. Sweden has a reputation for being one of the most progressive nations in Europe and consistently ranks among the happiest nations in the world. Jonathan Nackstrand | Afp | Getty Images The Sweden Democrats emerged from the country’s neo-Nazi movement in the late 1980s and have since struggled to distance themselves from accusations of extremism. The party won representation in the Riksdag for the first time in 2010. A gradual increase in national support then prompted the centre-right Moderate party to embrace cooperation with the Sweden Democrats in 2018. Kristersson’s moderates had previously ruled out negotiations with the right-wing party. Christerson said on Wednesday that he would begin the task of forming a new government “that can get things done”, Reuters reported. Complicating the picture somewhat, however, is the fact that the Liberals and Sweden Democrats — both part of the right-wing bloc — refuse to serve together in government.

“Very unstable coalition”

“I think in the end there will be some form of representation from the Sweden Democrats in the government, but it will lead to a very unstable coalition,” said Anamaria Dutceac Segesten, a senior lecturer in European Studies at Lund University in Sweden. CNBC by phone. Even if it is not through a ministerial position, Dutceak Segesten said the Sweden Democrats are likely to influence the agenda of a future government led by the moderate Kristersson. “It’s always complicated,” he added. “In 2018, it took three months to have a Swedish government. It wasn’t until December that we actually had a proper coalition, and it was a shaky one — one that had two no-confidence votes and a change of prime minister.” Duceak Segesten said a shaky start for the previous government was likely a sign of things to come for the formation of a new government. Jimmy Akesson, leader of the Sweden Democrats, is quoted as saying his party will be a “constructive and driving force” to rebuild security in the country. Jonathan Nackstrand | Afp | Getty Images Prianthi Roy, an analyst at the Economist Intelligence Unit, a research and advisory firm, told CNBC that the most likely outcome from the election was a center-right government led by the Moderates in coalition with the Christian Democrats and Liberals. “The Sweden Democrats, now the second largest party in parliament, will likely remain out of government, but will support the coalition in parliament in exchange for political concessions, including tighter asylum regulations,” Roy said by email.