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Sweden’s left sees power advantage after nationalists thwarted

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(Bloomberg) — Sweden’s Left Party, which wants to stop private firms from profiting on welfare services, says a political accord struck over the weekend will give it greater sway in shaping the country’s laws.

Prime Minister Stefan Loefven and the four-party opposition bloc announced a deal on Dec. 27 that allows minority governments to pass their budgets. The accord, which will stay in effect until 2022, solves a deadlock created by the Sweden Democrats, a party that holds the balance of power and that had vowed to block any bill that doesn’t include curbs on immigration. The deal means the Social Democrat and Green Party minority coalition now only needs the support of the Left to pass budgets.

“This agreement is something we want as it gives us a big influence over Swedish politics,” Left Party leader Jonas Sjoestedt said today in a phone interview. “We will use the influence we have to get as much leftist-oriented policy as possible.”

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The party’s main promise in the September election was to remove what it called a “profit hunt” by private companies providing welfare services such as education, health and elderly care. Delivering on this pledge marks a “precondition” for any budget collaboration, Sjoestedt said.

The krona, which gained in early trading, weakened 0.4 percent to 9.6013 per euro as of 2:24 p.m. in Stockholm. It fell 0.2 percent to 7.8713 per dollar.

Government pursuit

Before his budget was defeated earlier this month, Loefven reached a deal with the Left to work toward curbing welfare profits. It emerged as one of the main issues in the election amid concern that eight years of tax cuts from the previous government had eroded public services in the largest Nordic economy.

Loefven’s failure to pass his budget initially prompted him to call for an election in March in an attempt to resolve the situation. Loefven said the Dec. 27 deal allows the Social Democrats, who returned to power in September with pledges to cut unemployment and restore welfare, to enact large parts of their program.

The Left Party will continue to pursue its goal of joining the Cabinet, Sjoestedt said. Loefven rejected the party as a government partner after the election.

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