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. STOCKHOLM 00000952 002 OF 003 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