14 September 2014updated 15 Sep 2014 6:52am

Social Democrat victory in Swedish election marred by far-right surge

The anti-immigration Swedish Democrats finish third as Cameron’s ally Fredrik Reinfeldt is defeated.

(Photo By People celebrate at the election night party of the far-right Sweden Democrats in Stockholm. Photograph: Getty Images.)

After eight years in opposition, (the worst period in their history), the Social Democrats are returning to power in Sweden. The country’s prime minister Fredrik Reinfeldt has just conceded defeat following the general election and announced that he will resign tomorrow. With 5,126 of 5,837 constituencies counted, the Social Democrats are on 31 per cent, with Reinfeldt’s Moderate Party on 23 per cent, the far-right Swedish Democrats on 13 per cent, the Greens on 7 per cent, and the Left Party on 6 per cent. Turnout was an impressive 83 per cent.

In total, the centre-left alliance won 43.7 per cent of the vote to the centre-right’s 39.1 per cent. Social Democrat leader Stefan Lofven will now seek to form a coalition with the Greens and the Left Party, but the worryingly high level of support for the Swedish Democrats, who only entered parliament at the last election in 2010, presents the grim prospect of the anti-immigration party holding the balance of power.

Having fallen short of an overall majority (by 15 seats), while refusing to work with the far-right, the centre-left is danger of legislative gridlock. As outgoing finance minister Anders Borg said: “It is clear that from a broader perspective that this is difficult for Sweden. We go from having one of Europe’s strongest governments to having a weak government power with considerable uncertainty about economic policy.” The Feminist Initiative Party split the left-wing vote by winning 3 per cent (up from just 0.4 per cent in 2010), but fell short of the 4 per cent required for parliamentary representation. Their rise in support, combined with the far-right insurgency, means that despite finishing first, the Social Democrats only increased their vote share by 0.4 per cent.

From a UK perspective, the result is damaging for David Cameron in two respects. First, he has lost one of his closest EU allies in the form of Reinfeldt (part of his “Northern Alliance“), further tilting the odds against a successful renegotiation if he is still prime minister after next May. Second, the rejection of the Moderates, whose vote fell by 7 per cent, marks a backlash against welfare cuts and privatisation after a series of free school failures and care home scandals (policies emulated by the coalition). The ideological wind is no longer blowing the free market right’s way in the Nordics.

One final point worth noting, as Rob Ford suggests, is that the result looks eerily like a preview of the British election in May 2015: an unpopular centre-right government is expelled as voters protest against privatisation; a weak centre-left takes power without a majority; and the populist right (Ukip) surges into third place.