Social Democrat leader defeated after nearly seven years in power over plan to ease rent controls for new-builds.
Sweden’s Social Democrat prime minister has resigned after seven years in power, having lost a vote of confidence last week over a controversial plan to ease rent controls for new-build apartments.
Stefan Lofven’s resignation on Monday means the parliament speaker is now tasked with finding a new premier.
Lofven on June 21 became the first Swedish leader ever to lose a confidence vote in parliament after the Left Party withdrew its support for his centre-left government over its housing market plans.
The Left Party argued that deregulating the rental market would lead to rapid price increases and deepen segregation between rich and poor.
The development triggered frenzied talks as both the centre-left and centre-right tried to line up enough support to form a government.
Lofven, who had until midnight on Monday to find fresh backing in parliament, did not call for an early election as the Swedish Constitution allows him to, and is now expected to continue in a caretaker role until a new government can be formed.
Parliament speaker since 2018, Andreas Norlen, will ask party leaders who may be able to form a government. He alone decides which party leaders can begin these talks.
It is expected that Lofven, who heads Sweden’s largest party with 100 of Riksdagen’s 349 seats, will start these talks.
A 63-year-old former union boss and welder, Lofven headed a fragile minority coalition with the Greens since 2018, relying on support from two small centre-right parties and the Left Party.
The centre-left and centre-right blocs are now evenly balanced in parliament and opinion polls show a general election might not change the picture.
It took Lofven four months to form a government after Sweden’s last general election, in 2018, which returned inconclusive results.
The political drama comes as Sweden is in the mid of a housing crisis and real estate prices are skyrocketing in the country.
Lofven’s government had backed a deregulation plan because prices accelerated in the pandemic.
While Sweden has strict regulations on rents aimed at maintaining affordable prices in larger cities, this disincentivises property developers from building new homes for the rental market.
People can find themselves waiting for years for a rental contract, while buying property is increasingly hard as prices jump.