tinyurl.com/kbgrt -> cnn.worldnews.printthis.clickability.com/pt/cpt?action=cpt&title=CNN.com+-+Sweden%3A+Work%A0starts+on%A0new%A0govt+-+Sep+18%2C+2006&expire=&urlID=19522376&fb=Y&url=http%3A%2F%2Fedition.cnn.com%2F2006%2FWORLD%2Feurope%2F09%2F18%2Fsweden.election.result.reu
Sweden: Work starts on new govt STOCKHOLM, Sweden (Reuters) -- Center-right leader Fredrik Reinfeldt starts work on forming a coalition government in Sweden on Monday after ending 12 years of Social Democrat rule with vows to cut taxes and trim the welfare state. Reinfeldt, 41, will become prime minister after leading a four-party alliance to what he called an historic election victory on Sunday. He said it created "a new Sweden" that broke the Social Democrats' long domination of Swedish politics. Reinfeldt will take over from Social Democrat Goran Persson, 57, who oversaw strong economic growth in 10 years as prime minister but failed to overcome voter fatigue and accusations that he had lost touch with ordinary people. "The alliance has redrawn the map," liberal newspaper Dagens Nyheter said. Aftonbladet, the biggest selling daily, added: "Sweden is today waking up to a new political landscape." The coalition was due to start discussions on the distribution of government portfolios later on Monday although the cabinet will not be presented to parliament until October 6 Sweden's strong economy is likely to give him leeway for the reforms he wants to carry out. He has vowed to make the welfare state more work friendly by cutting benefits that decrease the incentive to get a job, and reduce taxes that make it less profitable to work. Reinfeldt and his partners in the Folk Liberal Party, the Centre Party and the Christian Democrats have 178 seats in the 349-seat parliament, a slim majority of seven seats. It was the first time in 25 years the centre-right had won a majority and the best performance by the Moderates since 1928. The Swedish crown firmed in early trade to 918 to the euro from 921 on Friday, while shares in companies where the centre-right has vowed to sell stakes rose on the bourse. Fine tuning needed The vote for Reinfeldt is not seen as a rejection by people of the "Swedish Model" of a strong welfare state with a dose of capitalism, rather an acceptance that it needs to be fine tuned. Reinfeldt has said there are many good things in the Swedish model, but that a mesh of benefits has sapped the will to work. He puts the real level of unemployment at 20 percent, almost four times the official rate, despite economic growth of 55 percent in the second quarter, its fastest for six years. He says the welfare state changes he wants are aimed at getting more in work and preserve the system for the future. The incoming prime minister favours Sweden joining NATO if there is broad agreement. He wants Sweden more involved in the EU but has no plans for a referendum on the euro currency in the next four years. As well as good growth, Reinfeldt inherits state finances that are in good shape and low inflation, although the central bank is raising rates to ward off future price pressures. "It is also the first time that the 'bourgeois groups' get a chance to govern in a good economic situation," said business daily Dagens Industri. "The new government can conduct a proactive reform policy." Shares in all the companies rose about 2 percent after Reinfeldt's win.
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