Sweden Reshuffles Government Amid Low Polls, Housing Crisis

  • Housing, trade among portfolios affected by cabinet changes
  • PM asks veteran Green for new impetus on housing shortages

Swedish Prime Minister Stefan Loefven reshuffled his cabinet on Wednesday, naming a veteran Green Party politician as housing minister and appointing a trade minister in a bid to regroup his coalition government amid infighting and record low poll numbers.

Peter Eriksson, a former Green co-leader and a member of the European Parliament, was asked to tackle one of the biggest emergencies facing the minority government -- a housing shortage that has pushed prices to unprecedented heights.

"It’s important for jobs and growth in Sweden that we boost housing construction," Loefven said after unveiling the changes. "This requires a housing policy that’s far more aggressive than we’ve seen over the past half century."

Speaking shortly after his appointment, Eriksson said he would reach out to opposition parties in a bid to find as broad an agreement as possible. Sweden needs to build around 700,000 new homes by 2025 due to a housing shortage that’s been amplified by an influx of about 250,000 asylum seekers over the past two years.

Eriksson said he saw both advantages and disadvantages to calls by, among others, the European Commission for tax deductions on mortgage costs to be phased out.

Other changes to the government included the appointment of Ann Linde as Minister for European Affairs and Trade.

The reshuffle was prompted by turmoil within the Social Democrats’ junior ally, the Green Party, which earlier this month elected Minister for International Development Cooperation Isabella Loevin as their new co-leader.

Loevin replaced former Green Party co-leader Asa Romson as deputy prime minister as part of Wednesday’s changes, which also saw the appointment of Karolina Skog as environment minister.

More Houses, More Jobs

In addition, Loefven asked his enterprise minister, Mikael Damberg, to focus on job creation as he reiterated his government’s aim of achieving the EU’s lowest unemployment rate by 2020.

Since the 2014 general election, Sweden’s two ruling parties have clashed on migration policy, with the Social Democrats forcing the Greens to accept stricter asylum rules and identification controls. Both parties have lost support in the polls, with the Greens falling dangerously close to the 4 percent threshold required to enter parliament.

More potential sources of conflict concern the future of state-owned utility company Vattenfall AB’s German lignite business and Sweden’s nuclear taxes, which Vattenfall and EON SE say may force them to close the country’s remaining six reactors unless it is abolished.

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