For the Social Democrats, architects of Sweden's cradle-to-grave welfare system, it was the worst trouncing at the polls since 1928. All told, they won only 138 seats in the 349-member Riksdag, or Parliament, and just 38% of the popular vote. Behind their defeat was widespread discontent over the high cost of social benefits. Pensions and health and other programs are generous, but the top tax rate of about 70% is the highest in the Western world.
Prime Minister Ingvar Carlsson resigned immediately and is likely to be succeeded by Moderate Party leader Carl Bildt, 42, who hopes to form a government...