Sweden Left Party Threatens No-Confidence Vote in Premier

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Jun 15 2021, 2:42 PMJun 15 2021, 6:16 PMJune 15 2021, 2:42 PMJune 15 2021, 6:16 PM

(Bloomberg) -- Sweden’s left-wing opposition threatens to challenge Prime Minister Stefan Lofven’s government if it goes ahead with proposals to deregulate the country’s rental housing market.

The Left Party would withdraw support for Lofven if his minority government doesn’t drop plans to allow landlords to charge market rates for new rental apartments within 48 hours, its leader Nooshi Dadgostar said on Tuesday.

For any challenge to be successful, it needs backing from the Moderate Party, the conservative Christian Democrats as well as the far-right Sweden Democrats. While eager to depose Lofven, the Moderates, which is the largest opposition party, has so far been reluctant to support the Left Party’s push against deregulation.

Dadgostar said she expects that with a concrete threat against the prime minister, that position may change.

“We have promised not to allow market rents to be introduced and to not let Swedish tenants down,” Dadgostar said at a news conference. “We can’t support the government if it pushes through proposals to deregulate rents.”

SEB’s economist Daniel Bergvall said it remains uncertain how the Left will proceed if ignored by the government as Dadgostar’s party has little incentive to cause political chaos or bring down a government led by the Social Democrats.

“The alternative would probably be something even further away from their own agenda,” Bergvall said in a research note.

The move comes as reforms of Sweden’s housing market have reemerged on the political agenda following accelerating house-price increases during the pandemic. A long-standing shortage of housing has increased pressure on the government to implement reforms to increase supply.

The proposal to liberalize rent-setting for new-built apartments is based on an agreement between the government and two centrist parties forged after the 2018 elections. They have drawn the ire of the Left Party, which wants to protect Sweden’s system of rent regulation that’s based on collective negotiations between tenants’ organizations and landlords.

With only 15 months to go before Sweden’s next general elections, the Left Party is facing a balancing act by issuing an ultimatum to topple the government as the political landscape is shifting. In recent months, a loose alliance of right wing parties, including the Sweden Democrats, has taken shape, and recent opinion polls show that constellation could rival the Social Democrats and its backers.

Christian Democrat leader Ebba Busch told news agency TT that she doesn’t believe the Left Party’s threat is credible.

“However, if the Left Party is ready to go all the way, the Christian Democrats aren’t a party that hesitates,” Busch said. “Our position is clear; we are not in favor of this government and will obviously not help save it.”