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CONCISATIAL

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Political Scandals Involving SDP Leaders

A series of scandals has also overshadowed the SDP's economic success and seriously damaged the Social Democrats' image of moral superiority. By early summer, the Government had suffered through two major scandals involving Social Democratic leaders condoning illegal arms sales and the use of influence by party and trade union officials to receive special consideration for housing in the extremely tight, government controlled market. The subsequent Ebbe Carlsson affair, however, coming just before the election, could prove to be the most damaging to the Social Democrats. (b)(3)

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In this latest scandal, Justice Minister Anna-Greta Leijon--previously one of Carlsson's most popular ministers--admitted to using her position to support a privately financed, secret investigation of the Palme assassination by Ebbe Carlsson, and appeared to place herself above the law in a country that holds the legal system sacrosanct. Prime Minister Carlsson himself came under strong criticism for his staunch defense of Leijon, but his confident performance before a parliamentary committee investigating the affair helped him recover some lost ground. It is unclear what effect the hearings--the first to be nationally televised-had on the populace as many Swedes were on summer holiday, but we believe the whole affair probably further eroded public faith in the SDP governmen(b)(3)

The nonsocialists, for their part, still suffer from the perception by most Swedes that they are incapable of leading the country--a point emphasized by a recent poll which showed that half of the likely nonsocialist voters believe that the Social Democrats will form the next government. Although they have tried to capitalize on the recent scandals involving the Social Democrats, the nonsocialists have instead had to devote a significant portion of their campaign to convincing voters that the three parties present a viable, cohesive option. Despite their efforts, we do not believe the nonsocialists have been able to override the memories of policy failures when they governed from 1976-1982, especially in economic policy. By contrast, the Social Democrats have successfully claimed that their economic policies have corrected the economic ills caused by the nonsocialists during that period.

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Social Democratic

Led Government Still Likely

The Social Democrats are likely to slip from their current level of 159 seats (out of 359) in the Riksdag with most of their lost support going to the Greens rather than the nonsocialist parties. In order to remain in power after the election, the Social Democrats will either have to continue their cooperation with the Left-Party Communists (VPK), garner the support of both the VPK and Greens, or form a coalition government with the nonsocialist Center Party. Some Social Democrats traditionally vote for the VPK in national elections to ensure a socialist majority. This year, however, the Social Democrats may lose additional votes to the left because the party's squeaky-clean image has been badly tarnished by the recent scandals. In addition, many SDP partisans

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Ebbe Carlsson--no relation to Prime Minister Ingvar Carlsson--is a wealthy publisher with close ties to the SDP.

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Approved for Release: 2017/09/13 C06141873