Swedish Election: Have the latest Alt-Right insurgents peaked already?

Europe’s next big election takes place in Sweden on Sunday, and the dominant themes will be familiar to anyone following politics in recent years. Just as we saw in France, Netherlands, Germany and Italy, the narrative involves declining establishment parties and a rising far-Right with realistic ambitions of becoming the largest party.

The Sweden Democrats – an overtly racist party, boasting former neo-nazis as candidates, have rocked the politics of this famously consensual Scandinavian nation. From finishing a distant third at the previous election, they have spent 2018 exchanging opinion poll leads with the governing Social Democrats. The latter has since restored a lead around 5% and are rated 59% likely to win Most Seats at odds of 1.7, compared to 2.4 about the insurgents.

That straightforward parliamentary calculation, however, is where any sort of predictability ends. Indeed if our market signals are correct, neither party will provide the Next Prime Minister or be part of the Next Government. The only thing about which analysts are united is that coalition negotiations will be torturous. See below for a list of the parties in contention to win seats, along with their latest average poll rating.

Main parties and their latest polling average

Social Democrats (S) 24.7%
Sweden Democrats (SD) 19.5%
Moderate Party (M) 18%
Left Party (V) 9.5%
Centre Party (C) 8.9%
Liberal Party (L) 5.7%
Green Party (MP) 5.7%
Christian Democrats (KD) 5%

Sweden Democrats will be excluded from coalition

Similarities with the Netherlands are obvious. Prior to their 2017 election, the mid-term narrative and polls had been dominated by Geert Wilders and the PVV. The response from the main parties was to take a tougher line on immigration whilst ruling out any deal with the far-Right.

At the election, Wilders was sidelined, ridiculed by opponents as the ‘Dutch Trump’ and the PVV slipped back to a distant second. Talk of ‘Nexit’ is now dead in the water.

As I wrote when reviewing 2017, that defeat represented part of a liberal backlash to the world-changing events of 2016, such as Brexit and the election of Donald Trump. Fears of populism have resurfaced in 2018, though, after Italians preferred the protest party 5SM and anti-immigration, anti-EU Lega Nord.

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