A changing nation, stretched to its limits

Global crises, including the invasion of Ukraine, have forced Sweden to reinvent its identity as a nation in a destabilized world order which opposes all of the values the country used to stand for, including non-alignment, free trade, market liberalism and multilateralism.

Swedish exceptionalism has come to an end, on all levels.

The mechanisms underlying these dramatic shifts can be traced back to the 1990s, when Sweden began to give up the Third Way that had for decades defined its national identity, by privatizing most of its welfare systems and joining the EU, a move away from the country's previous "alliance freedom."

This is how Sweden has became more and more continental since the early 2000s. In terms of policies and political practices, the country is far from the idyllic image developed under the influence of Prime Minister Olof Palme in the 1970s. Recent crises like the 2015 refugee crisis and the COVID-19 pandemic strained a welfare state system already reaching its limits, revealing and reinforcing existing splits within Swedish society.

Ukraine invasion abroad; inflation and gang violence at home

More recently, both the economic crisis that followed Russia's invasion of Ukraine and ongoing gang wars raging in Sweden's big cities have shed new light on the country's complex issues. While sky-high inflation has worsened social inequality, increasing gun violence and criminality in the suburbs raises questions about the Swedish state's ability to maintain law and order while also creating equal opportunities for all citizens.

This context also explains the results of the Sept. 2022 general elections, when far-right Sweden Democrats rose to second place, in part by promoting a much stricter immigration policy.

This marked a turning point for Swedish politics, with the party de facto becoming the king-maker. Moderate right-wing parties, which had previously refused to cooperate with the Sweden Democrats, had to rethink their strategies. While the Sweden Democrats didn’t formally join the government and still don’t hold a ministry, a look at the parliamentary coalition agreement suggests that they do wield real influence over the country's political agenda.

Soft to smart power

In that sense, Swedish exceptionalism has come to an end, on all levels. Sweden now must reinvent its national identity, to tackle the challenges at home and to define its new international role.

Sweden will have to invent a new raison d’être in the 21st century.

Two countries provide a glimpse of Sweden’s possible future. On domestic policies, the country may end up resembling its neighbor, Denmark, which has a much tougher stance on immigration. On foreign policy, Sweden is being forced to abandon its neutrality and become more proactive in terms of its defense policy — mirroring Germany's recent transition.

In other words, Sweden will have to take the same path as its European neighbors and invent a new raison d’être in the 21st century, by moving from soft to smart power. If it can manage, the Swedish dream can survive, even with a slightly stronger dose of realism.