Sweden heads to the polls on Sunday with a razor‑thin margin between the incumbent centre‑right coalition and a centre‑left alliance, and the outcome could determine whether the Sweden Democrats, a party widely described as far‑right, will be granted ministerial posts for the first time.

Prime Minister Ulf Kristersson of the Moderate Party has made clear that a post‑election government could include the Sweden Democrats in the cabinet if his bloc secures a majority. The Sweden Democrats currently support the government through a confidence‑and‑supply agreement but hold no ministries. Their potential elevation to full partners would mark a historic shift in Swedish politics, where the party's anti‑immigration and nationalist agenda would move from the periphery to the centre of decision‑making.

Current coalition and the Sweden Democrats' role

Kristersson leads a four‑party coalition comprising the Moderates, the Liberal Party, the Christian Democrats and the Sweden Democrats. The latter, despite the innocuous name, sit with the European Conservatives and Reformists in the European Parliament and are routinely characterised by analysts as a far‑right formation. Their influence has already been felt in several policy areas, even without holding a ministerial portfolio.

Since the 2022 election, the Swedish government has tightened its migration rules dramatically. Deportations have risen while the intake of asylum seekers has fallen to historic lows. Critics argue that the Sweden Democrats' backing of the coalition has been a key driver of this hardening stance, which marks a departure from Sweden's long‑standing reputation as a generous host for refugees.

Energy and defence policy under pressure

Environmental policy has also shifted. Sweden, once hailed as a European leader in the green transition, altered its 2040 energy target from 100 % renewable to 100 % fossil‑free, a definition that now embraces nuclear power. The change was embedded in the coalition agreement that the Sweden Democrats helped shape. While the government points to security concerns, notably the need to fund a larger defence budget in the wake of heightened regional tensions, opponents warn that the move undermines the country's climate ambitions.

Further evidence of the Sweden Democrats' sway is the recent rejection of offshore wind projects in the Baltic Sea. Officials cited potential interference with ballistic missile detection systems, a justification that many environmental groups see as a pretext for protecting fossil‑fuel interests and limiting renewable capacity.

Electoral landscape and possible outcomes

Polls show the two blocs locked in a close race. The centre‑left coalition, led by the Social Democrats and joined by the Greens, the Centre Party and the Left Party, seeks to retain Sweden's welfare model and its progressive climate agenda. The centre‑right bloc, anchored by the Moderates and bolstered by the Sweden Democrats, argues that a stronger defence posture and a more restrictive migration policy are essential for national stability.

If Kristersson's bloc wins a slim majority, the Sweden Democrats could be offered ministerial posts, likely in areas such as immigration, law and order or energy, portfolios that align with their core platform. Such a development would give the party direct control over legislation, moving beyond the influence they already exert through informal agreements.

Conversely, a centre‑left victory would keep the Sweden Democrats in their current supporting role, limiting their ability to shape policy directly but still allowing them to influence the government through the confidence‑and‑supply pact.

European implications

The Swedish election is being watched closely across the continent. Several EU member states have witnessed similar trajectories, where parties once on the political fringe have entered governing coalitions, altering national policies on migration, climate and fiscal matters. A formal inclusion of the Sweden Democrats would provide a concrete example of how far‑right parties can normalise power‑sharing arrangements within established democracies.

For European workers and households, the stakes are tangible. A government that leans further towards restrictive migration could reduce competition for low‑skill jobs but also limit the labour pool needed in sectors facing shortages, such as healthcare and construction. Changes to energy policy that favour nuclear and limit offshore wind may affect electricity prices and the pace of decarbonisation, with knock‑on effects for industry and consumers.

Trade unions have already voiced concerns. The Swedish Confederation of Professional Employees (TCO) warned that a Sweden Democrat‑led cabinet could erode workers' rights, particularly if the party pushes for stricter law‑and‑order measures that impact public sector employment. The Swedish Trade Union Confederation (LO) echoed these fears, linking tighter immigration rules to a potential weakening of collective bargaining power.

Business groups, however, argue that a stable, security‑focused government could improve investor confidence, especially in sectors such as defence and energy infrastructure. The Confederation of Swedish Enterprise (Svenskt Näringsliv) has suggested that a clear policy direction on nuclear energy could attract foreign investment and help meet the country's energy security goals.

What comes next?

Regardless of the result, the election will test the durability of Sweden's liberal tradition. If the Sweden Democrats secure ministerial roles, it could signal a broader acceptance of far‑right ideas within mainstream politics, encouraging similar parties in other EU states to seek formal power‑sharing deals.

European institutions are likely to monitor the situation closely. The European Commission has previously warned that member states must uphold EU values, including respect for human rights and the rule of law. Any perceived drift towards policies that contravene these principles could trigger debates in the European Parliament and potentially affect Sweden's standing in EU decision‑making bodies.

For now, Swedish voters will decide on Sunday whether to endorse a coalition that may hand the Sweden Democrats a seat at the table or to reaffirm a centre‑left alliance that promises to keep the country on its progressive course. The outcome will not only shape domestic policy but also offer a bellwether for the trajectory of far‑right influence across Europe.