Sweden's centre-right opposition has narrowly won Sunday's general election, beating a Social Democratic government for only the third time since the Second World War. The provisional results give 48.1% of the vote to the four-party Alliance for Sweden and 46.2% to the government and its two supporting parties, which translates to a seven-seat majority in the 349-seat Riksdag, Sweden's parliament. A detailed summary of results can be found in the Wikipedia article on the election.
Around 22.50 CET last night Moderate Party leader Fredrik Reinfeldt claimed victory at his party's election night vigil in Stockholm. Referring to the Moderates' renewal under his leadership, he said: "We stood for election as the New Moderates. We have won as the New Moderates. We will also - together with our Alliance friends - govern as the New Moderates." Prime Minister Göran Persson admitted defeat shortly afterwards at the Social Democratic Party's election night vigil: "We have lost the election, but we are not a beaten party. We will fight back." He said however, that he "would not lead the comeback", and announced his resignation as Prime Minister but also that he would resign as party leader in March 2007, at the party conference convened to choose his successor. Mr Persson has announced that he will hand in his resignation at 16.00 CET today.
The Speaker of the Riksdag, who in Sweden is constitutionally responsible for proposing a new government to the Riksdag, is expected to officially ask Mr Reinfeldt to form a government tomorrow. The opposition Alliance for Sweden (composed of the Moderate Party, the Centre Party, the Liberal People's Party and the Christian Democrats) had already agreed a common programme and on Mr Reinfeldt as its prime ministerial candidate before the election.
The centre-right opposition has bounced back from a decisive defeat in the general election of 2002, when the Moderate Party's proposal of large tax cuts and disunity between the four parties led to the government increasing its majority. Commentators are agreed that the move of the Moderate Party towards the centre under its new leader Fredrik Reinfeldt and the agreements reached between the four parties of the centre-right on major policy areas were important in gaining victory. The Moderate Party in particular did well, achieving its best result since 1928 and making a gain of 10.9 percentage points, the biggest gain made by any party since 1914. In contrast, the Social Democrats had their worst result since 1914, with 35.2% of the vote.
The key issue in the election was employment. The opposition argued that more needed to be done to get people into work to support Sweden's generous welfare state, and proposed to cut income taxes on those with lower incomes and to cut payroll tax, especially for the private services sector and for companies hiring long-term unemployed. This was to be funded mainly by cutting unemployment benefit from 80% of previous income to 70% after 200 days and 65% after a further 300 days. The opposition also argued for more choice in the welfare system.
The government pointed to Sweden's impressive economic growth, good fiscal situation and low unemployment rate of around 6%. They also attacked the opposition for wanting to undermine the "Swedish model" and attacking those who were already most vulnerable by cutting unemployment benefit. The opposition countered by arguing that unemployment is higher than official statistics suggest because of the large numbers of people on long-term sick leave and in early retirement, as well as government employment schemes.
Sweden's new government will be presented to the Riksdag on 6 October, and will present its first budget on 16 October.

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Opposition alliance wins power in Swedish elections