A warning from Sweden’s election

Sweden’s centre-right government has given its electorate lower taxes, strong economic growth and low public debt in its eight years in power. So its defeat in Sunday’s parliamentary election and the rise of an ultra-right-wing anti-immigration party need some explaining.

No doubt a rising unemployment rate played a role. Prime Minister Fredrik Reinfeldt’s privatisation and overzealous austerity policies made many Swedes, brought up in one of the world’s most generous welfare states, uncomfortable.

But the victory by the centre-left Social Democrats, who promised to expand welfare benefits again, was overshadowed by the showing of the far-right Sweden Democrats. They more than doubled their vote share, to 12.9 per cent, despite campaign scandals that exposed the neo-Nazi beliefs of some of its candidates.

Sweden’s immigration policies generally work. It has worked out an effective way to ensure businesses can get visas for foreign talent and it has historically been generous in accepting refugees. By now, just under 16 per cent of the country’s population is non-native-born, among the highest levels in Europe and more than that of the United States’ roughly 14 per cent.

However, there is a limit to what any individual government can do to control the flow of humans fleeing misery. Instability in Syria, Libya and Iraq guarantees that the pressure on Europe’s borders will increase further.

Europe’s governments need to face honestly the evidence that immigration and a broader fear of globalisation are leading parts of their populations down a potentially ugly ultranationalist road. Sweden’s Reinfeldt is among the few leaders who have forthrightly — and admirably — made the case for migration. Many politicians are instead panicking, mimicking just enough of the positions of anti-immigrant parties to win back votes, thereby fuelling the fire.

At the same time, immigration is one area in which the European Union can usefully become more unified to better control the flow.

The border-free Schengen Area, for example, which comprises 26 European countries, cries out for common budgets and policies to redress the geographical imbalance that makes some countries — Italy and Greece in particular — gateways for migrants. Italy has been shouldering the entire cost of its naval operation to patrol the Mediterranean. Since January, more than 100,000 migrants have been picked up from Italian waters; 1,900 have died. Last month, the EU set up a joint operation to replace the Italian one — yet the EU body in charge of running it lacks the funds to do an effective job.

The EU could take the simple step of substantially increasing the proportion of its budget, currently only 1 per cent, that it devotes to handling immigration. A harder task would be to adopt a common policy on accepting refugees, in effect a regional update of the 1954 Geneva Convention that governs asylum, and distributing the burden more fairly across member-states.

None of this would address Europe’s deeper failure to integrate immigrants into the wider society, something only governments can do. However, such steps would help alleviate the sense of unfairness and impotence that many Europeans feel. Without better coordination, the EU risks seeing anti-immigration parties from the United Kingdom to Greece make further gains; the Schengen Area unravel (France briefly resurrected border posts with Italy in 2011); and populist immigration policies that lead to the creation of a fortress Europe, built to the detriment of its trade and economy.

In Sweden, the vast majority voted for mainstream parties that welcome immigrants and refugees. But protecting that support will require more than Swedes’ liberal idealism. It will demand European action. BLOOMBERG