Sweden’s fragile coalition faces its first stress test as EU presidency begins

Johannes Frandsen
King Carl XVI Gustaf chats with Ursula von der Leyen in Kiruna at a launch event for Sweden's EU presidency.

Prime Minister Ulf Kristersson today kicks off Sweden’s EU presidency, hosting the EU Commission and president Ursula von der Leyen in the northern city of Kiruna, above the Arctic circle, after having spent the night in its world famous ice hotel. 

Some thousand kilometres south, in Brussels, there is a general unease about Sweden now being in charge of the work in the Council of ministers, the EU’s main legislator. This is because the centre-right minority government depends on the far-right Sweden Democrats for its parliamentary majority.

The widespread belief is that the nationalist, EU-sceptic party will hold the government hostage on ongoing EU negotiations, specifically on migration, climate or the rule of law.

But these fears are mostly unfounded. The Sweden Democrats have a huge incentive to keep the ruling government in place – for the first time in its history it has actual political power – and prime minister Kristersson wants to show off a successful EU presidency.

The two traditional governing parties, the Social Democrats and the liberal-conservative Moderates have prepared for the EU presidency for years, together, as neither one knew who would win last September’s election and form a government. 

In practice, this means that there is already a Swedish majority position on the 350 ongoing legislative files that are currently dealt with at the different levels of the council. Among them the climate laws that make up the Fit for 55 package, the EU’s plan for a green transition, and the many laws in the migration package. 

Johannes Frandsen
Prime Minister Ulf Kristersson and his government arrive in Kiruna for the gathering with EU officials.

When Kristersson last month gave a speech in the Swedish parliament about the upcoming EU presidency, he sounded almost pleading. Now is the time to take responsibility and make sure that Sweden looks after the common European interest, he told MPs. And, in return, he would seek broad consensus for any EU action.

This is a thinly veiled threat directed at the Sweden Democrats: if you take EU decisions hostage and make us look bad in Brussels, we will instead seek a parliament majority with the Social Democrats on those specific issues.

And so far, the Sweden Democrats have not crossed the line on EU issues. A case in point is the EU decision before Christmas on withholding EU cash from Hungary, because of the country’s rule of law shortcomings.

In the European Parliament, the Sweden Democrats doesn’t criticisze Hungary. But in the parliament in Stockholm, it does side with the centere-right government in punishing Hungary. 

The real issue with the Swedish presidency won’t be the EU decisions that the government has been able to prepare for, but rather the issues that require urgent – and brand new – EU actions.

Swedish politicians, from left to right, tend to view the EU from the outside rather than inside, the question always being: is this particular EU action good or not for Sweden? 

Most politicians in Germany or France have a different perspective. The EU is seen as a tool for the national sovereignty. Only by joining forces can Europe’s small welfare states withstand the economic dominance of the world’s great powers, like the US and China, goes the thinking. 

Whenever the union is at crossroads, like with the refugee crisis, the Coronavirus pandemic or Russia’s war in Ukraine, Germany and France tend to draw up new directions for the union as a whole.

Thinking for the EU as a whole in a sudden crisis, not just Sweden in the EU, will be a brand new role for Kristersson. And a difficult one, while depending on a nationalist, Euro-sceptic party back home. 

The first test will be the EU’s action to counter the US Inflation Reduction Act, the $370 billion subsidy package for green technologies which European lawmakers believe favours American enterprises and fear will lure European high tech firms across the Atlantic. 

This Wednesday, Germany’s chancellor Olaf Scholz, came out publicly backing common EU funding for European subsidies. It is something that France’s Emmanuel Macron has advocated for for some time. 

Swedish political parties of all colours dislike all plans that require more EU funding, and even more so common EU debt. But if there is a majority among the EU states, Kristerssons’ government will reluctantly back it in the end. Just like the last Social Democratic government begrudgedly backed the Covid recovery fund, financed through common EU lending.

Because, when France and Germany say that the action is in the EU’s common interest, the pro-EU parties in Sweden accept it. Not the Sweden Democrats, however. For a nationalist party, the EU’s common interest is simply not an argument. And this is the biggest risk of the Swedish EU presidency.