Sweden - Political realignment and a changing economy for the 2020s

The war in Ukraine and the Swedish turn towards NATO

The Russian invasion of Ukraine created a ‘Rubicon’ movement in Swedish public opinion regarding NATO. Before the invasion, support for NATO membership in Sweden had been stable for years, at around 40%. But after the invasion – and the political realignment of the Social Democrats, who changed stance and now approve of membership – things have changed.

Support grew in spring, rising to almost 60% according to an Ipsos poll.  And an application to join NATO was submitted, ending almost 200 years of a policy of neutrality: a case that really highlights the power of opinion polling. 

The rise of the far right

The Swedish Democrats shocked Europe with their four consecutive election successes in Sweden, growing from 2.9% in 2006 to 20.5% in 2022. A remarkable rise that makes them the second biggest party in Sweden. This makes Sweden a country with one of the largest new right-wing parties in Europe and a trend of declining establishment political parties. The combined vote share for the leading centre-right party (Moderaterna) and the leading centre-left party (Socialdemokraterna) has fallen from 61% in 2006, to 49% in 2022 resulting in weaker coalition governments both to the right and the left.

New green investment

In Boden in Northern Sweden, the first brand new steel mill for 50 years is being built in Europe. The startup H2 Green Steel is investing about €4 billion in the project and will use green hydrogen to make climate-neutral steel: the first of its kind. 

This is in line with trends in the private sector, where an Ipsos study commissioned by the UN^[1] found that 70% of companies see the private sector and business as a key actor in making society climate-neutral.

Climate questions are on the rise, with uber-influencer Greta Thunberg amassing almost five million Twitter followers – much more than any Swedish politician or political party has ever had. However, the Green Party did not gather much more than 5% in the 2022 election, suggesting that environmental-only parties are not in fashion right now.

PMI wants to buy Swedish Snus betting that Snus is going to replace cigarettes

Phillip Morris International (PMI) is betting big that Snus, a Swedish nicotine product, can replace cigarettes in the future. They have bid almost €16 billion for Swedish Company Swedish Match, who are the market leader in the area.

Snus is a Swedish non-smoking, oral tobacco product, originating from a variant of dry snuff in early 18th-century Sweden. It is placed between the upper lip and gum for extended periods, as a sublabial form of administering nicotine. 

The growth of the new product called nicotine pouches (that can be sold in the EU, unlike traditional snus) have been substantial in Sweden, where the daily users have grown from about 0.5% in 2019, to 3.7% in 2022 among people aged 18-74.

Fredrik Hallberg
Bjorn Benzler

Notes 

[1] "Transformation-Report" (Un-Global-Compact)