Just one week before the general elections that will take place on Sunday 17th September Sweden has been unsettled by an affair that has endangered the slight lead that the Alliance, i.e. the union of the Moderate Assembly Party, (M), the People's Party-Liberals (FpL), the Christian Democrat Party (KD) and the Centre Party (C) has over the leftwing (Social Democrat Party (SAP) presently in office, the Greens (MP) and the Left Party (Vp); the scandal broke on Monday 4th September. A complaint that was filed on 3rd September revealed that a member of the People's Party-Liberal had been spying on the website of the Social Democrat Party led by Prime Minister Göran Persson. 24 year-old Per Jodenius, member of the Young Liberals, the youth section of the People's Party-Liberals, used stolen access codes and passwords to break into the Social Democrat Party's website. With the help of these passwords, which are said to have been used 78 times between November 2005 and March 2006 the young liberal was able to access confidential and strategic information. Per Jodenius has been excluded from the People's Party-Liberals and will have to answer for his behaviour to the police. He runs the risk of a two year prison sentence.

The People's Party-Liberals secretary, Johan Jakobsson, also resigned on 5th September when it was revealed that he knew about the illegal activities of some of his party's members. He said that he should have taken a firmer stance against the perpetrators of the espionage. The party's leader Lars Leijonborg, whose resignation was requested by Prime Minister Persson, maintained that his party had not taken advantage of the information collated during the campaign.

Last week it was the social-democrats who hit the headlines with the resignation of Lars Danielsson, a close advisor of the Prime Minister after he was criticised for his role in the management of the post-tsunami situation in December 2004. Danielsson was also accused of having impeded the work of the independent committee established in January 2005 to reveal how the government had reacted to the natural disaster. This resignation is the second linked to the affair after that of Foreign Minister Laila Freivalds in March last. We should note that the tsunami killed 543 Swedes.

The recent scandal seems to have somewhat affected the parties of the Alliance and for the first time in weeks it finds itself behind the leftwing forces in a poll undertaken by SIFO, published on 6th September last. The government parties have 48.1% of the voting intentions versus 47.7% for the Liberals. In this poll the People's Party-Liberals, the second biggest party in the Alliance has lost 2.9 points in comparison with the last poll undertaken some days earlier. "This incident has led to a re-mobilisation of the social-democrat voters", declared Alf Sjostrom from the institute Novus Opinion.

Until the affair was revealed the Alliance was leading the race, with the Swedes appearing to be ready to turn over to the opposition after ten years of government by Göran Persson; notably due to the charisma of the leader of the Moderate Assembly, the young and seductive Fredrik Reinfeldt.

For the first time in the country's history the liberal parties are standing together in the general elections. Learning from their previous failure they have abandoned suggestions of making radical change (cutting social spending or major reductions in taxes) but maintain that they will not interfere with the Welfare State (Folkhemmet, the People's House) which the Swedes are very much attached to. "The central issue of these general elections is the following: are you fed up (or not) of having the social-democrats in power? With Fredrik Reinfeldt the Moderate Assembly has made taken a totally different direction. Its programme is now very close to that of the Social Democrat Party", stressed political analyst Lena Mellin.

Fredrik Reinfeldt maintains that if the Alliance win some State companies will be privatised (the Nordea bank, the telecommunications company TeliaSonera and the airline SAS). "We achieved good results when we deregulated the market in the 1990's. This policy must be continued in order to boost growth", declared the Moderate Assembly leader. The Swedish State is the country's main employer; it holds a majority share of 57 companies that employ around 200,000 people. In all the public sector employs around 30% of Swedes i.e. the double of the average in the other countries of the EU (15%).

Another major reform suggested by the Alliance is the freezing of the tax on property. Opposition parties would like to establish a ceiling equivalent to 5,000 kroner i.e. 696 euro for this tax by 2007. But their aim is to abolish taxation on property by 2008 and to replace it in the long term by a local contribution. This tax that represents approximately 1% of the value of the property has been criticised due to the rise in real estate prices. Indeed some old people, who have been owners for years are now finding it increasingly difficult to pay this tax. Finance Minister Pär Nuder (SAP) criticised the opposition's project saying that it would benefit only the richest: "People will pay identical taxes whether they own a castle or a hut". The Social Democrats have raised doubts about the ability of the parties in the Alliance to agree in order to govern. They have not however met with much success in this. "No one now doubts that we are an alliance and that we are together", declares Fredrik Reinfeldt.

For their part government leaders, who have been finding it hard to mobilise their supporters over the last few weeks seem to have found new hope in the wake of the irruption of the affair that everyone is calling the "Swedish Watergate". "Because of this affair it appears that we might hope for a social democrat victory", declared Henrik Bos, editor of an important newspaper, Dagens Nyheter.

Prime Minister Göran Persson is leading a campaign that finds support in his economic results. Over the last ten years in government productivity has increased by 2.5% per year, exports have risen by around 6% per year and the growth of the GDP lay at 3% in 2004 and 2005 (it might well reach 4% this year). Inflation is lower than 1% and public debt fell last year to below 50% of the GDP for the first time since 1995. In addition to this the kingdom's inhabitants benefit from a generous Welfare State as well as effective social programmes; they live in one of the most egalitarian societies in the world. Although the unemployment level is low (6.3% of the working population in June 2006) Swedes are increasingly worried about the country's economic situation, notably about the development of the labour market. Indeed according to some economists the government alters the figures and the reality is that more than one million Swede receive States subsidies and are not counted amongst the jobless.

In its electoral programme the Social Democrat Party promises to bring the maximum of unemployment benefit up to 930 kroner per day instead of the present 730 by the beginning of next year. This measure would enable 80% of wage earners to maintain 80% of their income during their time unemployed. Only half of wage earners receive this percentage when they lose their job. The Social Democrats are also suggesting an increase in spending on old people promising 100,000 new places in retirement homes, as well as an increase in subsidies for those benefiting from sickness pensions, and greater investment in social help in the home.

Finally the Prime Minister's party repeats its desire to break Sweden's dependency on fossil fuels by 2020. The country is already one of the States that is the least dependent on oil. During the energy crisis in the 1970's Swedish policy with regard to energy and the environment was oriented towards renewable energy sources. In 2002, 41% of the energy produced in Sweden came from oil, 14.2% was nuclear and 35% came from renewable sources.

On 6th September last two candidates for the post of Prime Minister, Göran Persson and Fredrik Reinfeldt, met under the glare of the television cameras; the two men previously agreed not to talk of the affair that is rocking the country at present. According to political analysts the liberal candidate was more effective in the debate that mainly focussed on social and economic themes. The Prime Minister maintained that 550 new jobs were being created daily in the kingdom and that he did not see why he should change his policy. For his part the opposition leader highlighted that the social democrats still had not succeeded in agreeing with their Green and Left Party allies on the formation of a union government if they won.

Just one week before the election uncertainty reigns. One thing is certain however: the Social Democrat Party, the party that has dominated Swedish political life for the last 70 years will enter one of the toughest electoral battles that it has had to fight in a long time.