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Country Commercial Guides for FY 2000: Sweden Report prepared by U.S. Embassy Stockholm, released July, 1999 Note*

III. POLITICAL ENVIRONMENT

- Bilateral Relationship with the United States

The relationship between Sweden and the U.S. is excellent. Despite foreign policy differences in the seventies and early eighties, relations have improved markedly over the past ten years. The United States and Sweden work very closely on regional issues involving the three Baltic States and Russia as well as on EU-related matters. Regardless of political party affiliation, there is an active schedule of official visitors to both countries and regular high-level government meetings.

- Major Political Issues Affecting Business Climate

Parliamentary elections were last held in September 1998. Prime Minister Goran Persson's top domestic priority is to strengthen Sweden's economy and to combat unemployment. The referendum on European Union Membership was approved on November 13, 1994, and Sweden became a member of the EU on January 1, 1995. Sweden has been a leading member of the Council of Baltic Sea States, which promotes close economic and political cooperation among the states bordering the Baltic Sea.

- Political System

Sweden is a constitutional monarchy and a multi-party, parliamentary democracy. While the King is the Head of State, all executive authority is vested in the Cabinet, which is formed through direct parliamentary elections every 4 years. It consists of the Prime Minister (Head of Government) and some 20 Ministers. The Social Democratic Party is the current majority party, ruling in an informal cooperation agreement with the Left (former Communists) party and the Greens.

- Major Political Parties

Social Democratic Party - Regained power after the 1994 elections. The party has strong ties to the trade union movement and has made reducing unemployment a top priority. Its strongest supporters are blue-collar workers and public-sector employees. It is a proponent of a strong public sector.

Moderate Party (Conservative)- Stands for individual freedom with a minimum of involvement by the Government, low taxes, stimulation of private industry and business, and strong defense.

Center Party - Supported by agrarian groups but includes a significant environmentalist faction. The party wants an economy based on free enterprise, competition and widespread ownership.

Liberal Party - Supports a socially oriented market economy. The party wants an economy that does not lead to the concentration of power, economic gulfs or over-exploitation of the environment. It favors unrestricted immigration and generous aid to developing countries.

Left Party - Based on a socialist/communist tradition, it has traditionally supported a Social Democratic government. The party is strongly against EU membership; it is also the most Populist Party in the political system.

Environment Party (The Greens) - Has a basic vision of a society in ecological balance with nature. The economy must be subordinated to the ecological system. The party has a strong anti-EU stance and backs the political left.

Christian Democratic Party - Stands for morality and values-based governments, is anti-abortion, and wants greater support for homes and families in order to reduce youth problems, alcoholism, crime, and other social problems. Like the Liberals, the party desires more aid to developing countries and a liberal immigration policy.