Russia, Trump and a battle over welfare loom over Sweden’s election

Whoever wins Sweden’s general election on Sunday will face an unusually difficult financial equation with a structurally higher defense bill, growing demands on the welfare state as well as shrinking room to pay for both.

That challenge comes as Russia’s war in Ukraine grinds through its fifth year, and uncertainty over U.S. President Donald Trump’s commitment to European security adds pressure on the continent to shoulder more of its own defense burden.

Yet neither Russia nor Trump has featured prominently in the election campaign. Instead, voters have focused largely on domestic concerns including health care, schools and household finances, even as economists warn that the next government will have considerably less room to deliver on its promises.

“We do see a lot of election promises, like we usually do in an election campaign,” SEB Chief Economist Jens Magnusson told CNBC. “But I do think that it will be a rather hard crash when these promises meet with the reality after the election.”

While domestic issues dominate the vote, the next government will inherit fiscal and security commitments that leave it with limited room to maneuver.

Sweden’s center-left opposition parties led by the Social Democrats have had a meaningful lead in most polls in the run-up to the election. But that lead has narrowed as the current government led by the Moderate Party’s Ulf Kristersson mobilized support among Swedes. 

The government holds support from the far-right Sweden Democrats, which the center-left has refused to collaborate with, and the makeup of any government coalition post-election remains up in the air.

“We will have to prioritize defense spending for quite some time,” Magnusson said. “We will have to prioritize Ukraine, and we cannot continue to both cut taxes and increase spending, and just borrow the difference.”

Sweden joined NATO in March 2024, abandoning more than two centuries of military non-alignment in the wake of Russia’s full-scale invasion of Ukraine.

NATO members last year agreed to significantly hike defense spending to 3.5% of GDP by 2035, alongside an additional 1.5% for defense- and security-related spending.

Sweden’s military expenditure rose sharply between 2022 and 2025, according to the Stockholm International Peace Research Institute, as the country embarked on a major rearmament drive.

Despite that transformation, foreign policy has been largely absent from the electoral debate. Political scientists say the reason is not that security has become less important, but that there is relatively little disagreement among the major parties over Russia, NATO or continued support for Ukraine.

“The signal being sent by effectively all parties is that Swedish voters will have to get used to defense being a much larger part of the budget,” Jonas Tallberg, professor of political science at Stockholm University, told CNBC.

“It’s about how we should fund defense, rather than whether Sweden should invest in defense as…