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Sweden's Social Democrats Win Third Term - 2002-09-16

Swedish voters have given the ruling Social Democrats a third term, countering a rightward shift in Europe and boosting chances that Sweden will soon join the common European currency, the euro. Sweden's currency, the crown, has already shown its approval of the election results.

The value of the crown jumped more than one percent Monday, and Swedish bonds were also stronger as it became likely that a referendum on joining the Euro zone would be held as soon as early next year. Opinion surveys indicate about half of Swedes favor adopting the common currency.

With Swedish voters apparently giving the Social Democrats enough support for a third term in office, it appears certain that Prime Minister Goran Persson, the politician most respected by financial markets, will lead the pro-euro forces into the referendum.

Sweden is a member of the European Union but, like Britain and Denmark, has until now opted to remain outside the euro zone.

The Social Democrats took 40 percent of Sunday's vote, four percent more than they received in the last election four years ago. The party has been in power since 1994, and has ruled Sweden for all but nine of the past 70 years. Together with the Left and the Greens, they look set to control 191 seats in the 349-seat Swedish parliament.

Prime Minister Persson campaigned this time on a promise to protect Sweden's cherished welfare state. Holding a bouquet of red roses after the votes were counted, the prime minister said the results should give hope to Germany's Social Democrat Chancellor Gerhard Schroeder, who is fighting to withstand a challenge from Christian Democrats in next week's German elections.

But while Sweden's Social Democrats did well, the big surprise was the showing of the Liberal Party, which nearly tripled its support of four years ago, surging past two other parties to become the third largest faction in parliament.

The Liberals built their campaign around proposals to tighten immigration rules, including a requirement that immigrants pass a Swedish language test before being granted citizenship.

Nearly 7.5 percent of Sweden's population is composed of immigrants from outside the European Union. But most analysts say the election results will have little or no impact on Sweden's relatively tolerant immigration policies.