Sweden's rent law crisis brings down its government

The Left Party has withdrawn its support and the motion of censure has prospered with the support of the far-right

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Swedish Prime Minister Stefan Löfven at a press conference on Thursday

BarcelonaThe Swedish government, constituted of Social Democrats and Greens, has fallen because of the censure motion presented by the Left Party together with the xenophobic Sweden Democrats party. The basis of this political crisis is the government's proposal to reform the law regulating rents to liberalize prices in newly built housing. The rejection of the government has had the support of 181 MPs, six more than than is required. The Prime Minister, Stephan Lofven, now has a week to decide whether to call early elections, which would be the first since 1958, or whether to give the option of forming a new coalition government.

Right now, the regulation establishes that prices are negotiated between associations of owners and tenants, in a model that emulates collective bargaining in the labour market and seeks to ensure "reasonable" rates depending on the characteristics of housing and location. The reform proposed by the government - which is still in the process of public consultation and is expected to be debated in Parliament in the autumn - would allow the owners of the homes to be built from next year to set the rental price they deem appropriate, without having to negotiate it first with the tenants, who are mostly represented by the Swedish Association of Tenants.

These steps towards rent liberalisation are part of the conditions that the Centre Party and the Liberal Party demanded when they agreed in January 2019 to invest Löfven and give external support to his cabinet after the September 2018 elections.

The Left Party - an offshoot of the defunct Swedish communist party - did not sign the agreement that made the government formation possible three years ago, but tacitly supported it by not voting against it. But it has always maintained the threat of bringing down the government if it moved too far away from the left-wing positions. One of the red lines was the reform of the rental market, which he considers to be the beginning of the end of this so-called swedish model. On Tuesday, the leader of the Left Party, Nooshi Dadgostar, gave 48 hours to withdraw the proposal, but the executive responded that it would stand firm in its commitment to its two external partners. The response was the announcement of the withdrawal of its confidence.

The Left Party was unable to table a motion of censure because it does not have enough MPs, but the Sweden Democrats quickly followed suit, receiving the support of the other two opposition parties, the Conservatives and the Christian Democrats. The four parties have a combined total of 181 MPs, and the absolute majority that would allow the motion of censure to pass is 175.

Elections or a new government

Sweden has not held an extraordinary election since 1958. Moreover, in the last 40 years, Parliament has voted on eleven no-confidence motions and none of them has gained enough support to go ahead. Löfven, however, has another option: resign and open negotiations to form a new government. Opinion polls now suggest that the left and right blocs remain deadlocked and that the same situation could repeat itself.

In his appearance on Thursday, when the no-confidence motion was announced, the Prime Minister has branded the Left Party as "irresponsible" for creating a political crisis in the midst of a difficult time due to the pandemic. In addition, he has insisted that the reason why this formation has withdrawn confidence is not justified, since the proposal on the reform of rents is still at a very early stage and would affect only new homes, which account for about 1% of new rental contracts each year in Sweden.