SWEDEN: AMBASSADOR'S MEETING WITH MODERATE PARTY

C O N F I D E N T I A L SECTION 01 OF 03 STOCKHOLM 000952

SIPDIS

SIPDIS

E.O. 12958: DECL: 06/27/2016
TAGS: PREL PGOV PINR ELAB SW
SUBJECT: SWEDEN: AMBASSADOR'S MEETING WITH MODERATE PARTY
LEADER REINFELDT

REF: STOCKHOLM 913

Classified By: Ambassador, reason 1.4 (b) and (d).

Summary and Comment
--------------

1. (c) Ambassador, accompanied by Polcouns, met June 26 with
Moderate Party leader Fredrik Reinfeldt, the virtual shadow
Prime Minister of the center-right (in the left-skewed
Swedish spectrum) opposition. Reinfeldt, who took the lead
in forming the opposition's Alliance for Sweden, said the
September 17 parliamentary elections were focused almost
exclusively on the domestic issues of employment,
environmental concerns, and preserving and enhancing Sweden's
welfare state programs. He said the Moderates under his
leadership had moved toward the center by accepting not to
dismantle basic welfare state programs, while the Social
Democrats had also moved to the center, abandoning
socialism's tenets and accepting a market economy. He
expected the elections to be close, but believed that the
opposition's unprecedented unity and joint positions on key
policy issues would convince cautious Swedish voters that a
center-right government would be predictable and not put the
welfare state at risk. International issues such as the war
in Iraq and dealing with Iran's nuclear program would not
play any prominent role in the elections. In general,
relations with the U.S. and the U.S. role in the world were
not campaign issues, though Reinfeldt noted that Persson had
on three occasions during debates sought to taint Reinfeldt
by calling his approach to certain issues "American" options.
Reinfeldt said that the average Swede has positive views of
the U.S., but that President Bush was not popular. For his
part, Reinfeldt said he agreed "in part" with the policies of
President Bush, but noted reservations about Iraq and the
role of religion in American politics. Reinfeldt said that
because the U.S. was so occupied with Iraq, the "rest of the
world" would have to take a larger role in Afghanistan.


2. (c) Comment: Reinfeldt has made clear since taking over
the leadership of the Moderate Party in 2003 that he believes
the future of the party and the opposition is to appeal to
potential crossover voters who have traditionally supported
the Social Democrats. Accordingly -- as he made clear in his
discussion with the Ambassador -- he has made a concerted
effort to demonstrate that a government he would lead would
preserve what have become the consensus essentials of the
Swedish welfare state. Any tinkering would be around the
edges, particularly on policies intended to increase the
amount of real employment. Reinfeldt's strategy has been
relatively successful, in that he has assuaged concerns about
dismantling social support programs and raised the polling
numbers for the Moderates and the Alliance for Sweden. As we
approach the parliamentary elections, the Alliance for Sweden
is in a dead-heat with the Social Democrats and their Green
and Left Allies (reftel). With not much to distinguish the
policy proposals of the two sides, the election will to a
large extent turn on the match-up between PM Goran Persson
and his challenger Reinfeldt. End Summary and Comment.

Trying to Make the Election about Employment
--------------

3. (c) An initial June 26 courtesy call by the Ambassador on
Moderate Party and opposition leader Fredrik Reinfeldt turned
into an hour-long discussion of the upcoming Parliamentary
elections. Reinfeldt said the campaign began two years ago,
with the four parties of the opposition forming an
unprecedented union, the Alliance for Sweden. This
initiative occurred, according to Reinfeldt, at his
invitation and was intended to demonstrate the unity of the
center right to an electorate accustomed to fractiousness.
The establishment of the Alliance for Sweden coincided with a
substantial rise in the polls for the center-right.


4. (c) Reinfeldt said that until a couple of months ago, he
had anticipated that the campaign would turn primarily on the
issue of employment, with the Alliance underscoring the
"jobless growth" of the Swedish economy. He said 60,000
jobs, mostly in industry, had been lost since 2000.
Reinfeldt said that although the official unemployment
figures were low -- now 4.2 percent -- an additional 12-13
percent of primarily low-skilled workers are in
government-paid education or training or on sick leave or
other programs that mask their unemployment. Seeking to
change the election topic, Prime Minister Persson had
recently begun focusing on environmental, health, and school
issues that he considered to be winners for the Social
Democrats.


5. (c) In response to a question from the Ambassador,
Reinfeldt noted that the college-educated are also
increasingly having problems finding appropriate jobs. He
said about one-fifth of college grads do not find a job.

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Government programs mask and postpone the problem by sending
those graduates who cannot find jobs back to the university
for more education. Reinfeldt said Sweden has poor results
in terms of employing young job seekers; among European
countries, he added, only Italy is worse.


6. (c) Reinfeldt says the Government claims nearly 80
percent of adult Swedes have jobs, but notes that figure
depends on how "job" is defined. Training programs counted
as jobs, as did the substantial number of Swedes on sick
leave, much of it long term. Reinfeldt said the number of
Swedes claiming sick leave has grown rapidly since 1997 --
and this in a country that prides itself on its quality of
health care and its population's exceptional longevity. The
problem is not, Reinfeldt said, a health issue.


7. (c) Reinfeldt acknowledged, in response to the
Ambassador's question, that it was easier to fire workers in
Sweden than, for example, France, Spain, The Netherlands,
Belgium, or Luxembourg. In those countries, employment
guarantees were legislation-based. In Sweden, the employers'
association works cooperatively with the trade unions. For
example, the communications company Ericsson was able to
substantially reduce its work force in Sweden -- moving
operations abroad where they would be more competitive -- in
agreement with the union.

Differences and Similarities
--------------

8. (c) Reinfeldt said that Sweden was undergoing significant
reform in terms of privatizing health and education services.
Many elementary and secondary students are now studying in
private "free schools" that are state funded through an
individual student voucher system. Some health services are
also being privatized. The Alliance for Sweden wants to see
more of this; the governing center-left block wants less.


9. (c) Traditionally, Reinfeldt said, Sweden has had a
strong, dominating leader who sets the policies affecting
individuals' lives. Prime Minister Persson, who has been in
office ten years, falls in this tradition. The Alliance for
Sweden stands for the alternative of letting people make
their own decisions. Reinfeldt noted, however, that the
Social Democrats have decided and demonstrated that they can
live with a market economy, and the Moderates, under his
leadership, have consciously sought to remove the conflict
over the preservation of the welfare state. The Social
Democrats abandoned the tenets of state-ownership socialism
in the 70's, he said.

Persson Tries to Change the Topic
--------------

10. (c) Reinfeldt noted that PM Persson has sought to
re-direct campaign debate away from employment and toward
environmental and education and health issues. Persson has
focused recently on climate change, and sought to demonstrate
disunity among the Alliance for Sweden on nuclear power (the
Center Party had previously called for the elimination of
nuclear power generating plants in Sweden). The nuclear
issue has been addressed, Reinfeldt said, by a recent
agreement published by the Alliance calling for what amounts
to a maintenance of the status quo through the parliament's
next mandate period, until 2010.

America and the World
--------------

11. (c) There would be very little, Reinfeldt said, of
international or even European issues in the campaign, and
little said about the United States. Reinfeldt said there
was a great deal of American influence in Swedish society,
via movies, travel, education, and television. But, he said,
President Bush was not popular here. The war in Iraq was
seen as not working, and problems in Iran and Afghanistan
were worrying the world. The U.S. was so occupied in Iraq,
he said, we would have to see how the rest of the world would
handle Afghanistan. (Note: Sweden has had programs in
Afghanistan for the past 25 years, and currently leads a
Provincial Reconstruction Team in Mazar e-Sharif.)


12. (c) In general, Reinfeldt said, anti-Americanism would
not enter into this campaign, in contrast to previous
campaigns, and there would be little reference to the U.S.
He noted, however, that on three occasions Prime Minister
Persson had sought to tie Reinfeldt to unpopular U.S.
policies by calling Reinfeldt's positions "American" options.
In general, however, Reinfeldt said Persson was not "falling
out" against the U.S., and no one other than Persson would
make remarks referring negatively to the U.S. Personally,
Reinfeldt said, when he looked at what Bill Clinton did, he
had no problem with it. He could agree "in part" with
President Bush's policies, citing his initiatives on small
business and "No Child Left Behind."

STOCKHOLM 00000952 003 OF 003




13. (c) Reinfeldt said he had been in the U.S. for the past
three U.S. elections. He was not comfortable with the
references to God made during the elections. This could not
happen in Sweden, where politics was separated from religion.
Reinfeldt acknowledged that a large percentage of President
Bush's constituency was church-going believers. He said in
Sweden this constituency was small. The Christian Democrats
claimed this group, he said, but large numbers of the Church
of Sweden members supported the Social Democrats or Moderates
-- in contrast with the "Free Churches," who supported the
Christian Democrats. But in Sweden, religion and politics
generally did not mix.


14. (c) Reinfeldt said most Swedes were not pre-occupied
with the policies of President Bush. He contrasted this with
Denmark, where, he said, because of its role in Iraq this was
a constant topic. Reinfeldt said that "the politically
correct left" in Sweden were "hysterically hoping for Hillary
Clinton" to become the next U.S. President.

Reinfeldt's Ideology
--------------

15. (c) The Ambassador asked Reinfeldt if there were
elements of his own constituency that were putting pressure
on him. Reinfeldt said he was being pushed by the "new
liberals" who wanted him to tear down the welfare state and
rapidly reduce taxes. They are true believers, he said, just
as President Bush has the believing Christians who pressure
him, (Comment: It was clear that Reinfeldt had no intention
of succumbing to the pressure from the new liberal
constituency, believing that his success in the polls has
been based on his strategy of moving his party to Sweden's
center. Reinfeldt's "ideology" is pragmatic compromise.)
WOOD