IV. POLITICAL ENVIRONMENT - Nature of Bilateral Relationship with the United States The bilateral political relationship between Sweden and the United States is excellent. In recent months, the United States and Sweden have cooperated on a growing range of issues, including the Baltics, the former Yugoslavia, and Russia. There have been top-level visits by Swedish Prime Ministers to the White House regardless of which political party has been in office on either side. There are also contacts on all levels of the Swedish political sector, including youth leaders. - Major Political Issues Affecting Business Climate Sweden will hold parliamentary elections on September 18. Opinion polls have indicated a possibility that the ruling non-socialist coalition of PM Bildt will be ousted by the Social Democrats led by former PM Carlsson. A change in Government, however, is not expected to alter the sound ties that exist between the United States and Sweden. In addition, the issue of Sweden's possible membership in the EU will be determined in a referendum on November 13, 1994. The political parties have agreed to respect the results of the referendum, even though referendums in Sweden legally are only advisory. Since Sweden belongs to the European Economic Area (EEA), however, it already adheres to EEA (and most EU) rules and norms. - Brief Synopsis of Political System Sweden is a constitutional monarchy and a multiparty, parliamentary democracy. The King is the Head of State. All executive authority is vested in the Cabinet, which is formed through direct parliamentary elections every 3 years (after the 1994 election election periods will be 4 years) and consists of the Prime Minister (Head of Government) and some 20 Ministers. The present government is a coalition of four non-socialist parties, with the Moderate conservative Party leader as Prime Minister. - Schedule for Elections The next election will be held on September 18, 1994. It will be for the Parliament's 349 seats, as well as for county and municipal administrations. The election after that is scheduled for the third Sunday in September of 1998. - Orientation of Major Political Parties Seven political parties have been represented in Parliament from October 1991-October 1994. The four coalition parties are: the Moderate Party (conservatives), the Liberal Party, the Center Party and the Christian Democratic Party. The Moderate Party (conservative) with 80 seats in Parliament, chairs the following Ministries: Prime Minister's Office, Justice Department, Foreign Ministry (both the Foreign Minister and the Minister for European Affairs and Foreign Trade), Defense, Commerce & Industry, and Education. The party stands for individual freedom with a minimum of involvement by the Government, low taxes, and stimulation of private industry and business, and a strong defense. The Liberal Party, with 33 seats in Parliament, holds the following seats in Cabinet: Social Affairs Minister (also Deputy Prime Minister), Finance Minister, and Cultural Affairs (which includes immigration). The party stands for generous social benefits without too much control by the Government. The Center Party, the former Agrarian Party, with 31 seats in Parliament holds the following Ministries in the Cabinet: Environment and Natural Resources, Labor and Agricultural Ministries. The party believes in decentralization, the protection of the environment by means of high taxation, and the support for farmers. The Christian Democratic Party, with 26 seats chairs the following areas in the Cabinet: Foreign Development Assistance, Communication and Transport, and Public Administration. The party, relatively close to both the Center and Liberal party, stresses the importance of the family and ethics. Environmental issues are also on top of their list. Other parties represented in Parliament are: Social Democratic Party with 138 seats in Parliament has led all Swedish governments since World War II except for 1976-82 and 1991-94. Polls suggest that the party will return to power in the September 1994 election. The party stands for traditional social democratic values with a firm focus on the goal of full employment for everybody, strong influence by labor unions, full-scale, government-controlled social services, but leaves at the same time room for a liberal market economy. If it comes to power in September, it intends to attack unemployment and the resulting deficit by, among other steps, stimulating consumer demand. In June 1994, the SDP formally went on record in favor of Swedish accession to the EU. Left Party, used to be a communist party, has 16 seats in Parliament. New Democracy , with 25 seats in the Parliament, is the youngest party in Swedish politics. It is pro-business and anti-government control. The Environment Party, The Greens. The party was represented in Parliament 1988-91, and had then 20 seats. In the 1991 election it only got 3.4 percent of the votes. Certain polls indicate that the party could again obtain the required four percent to be represented in the Parliament in the September 1994 elections. The party wants to put environmental aspects on all sectors of the society. The Greens are against the EU, nuclear energy, the bridge to Denmark. They are for decentralization of the entire society.