A center-right opposition vowing to streamline Sweden's famed welfare state ousted the Social Democratic government in a close parliamentary election, ending 12 years of leftist rule in the Nordic nation.
Swedish Prime Minister Goran Persson said his Cabinet would resign after the Social Democratic Party's worst election result in decades on Sunday.
With 99.7 percent of districts counted, the four-party opposition alliance led by Fredrik Reinfeldt had 48.1 percent of the votes, compared with 46.2 percent for the Social Democrats and their two supporting parties.
"It was teamwork that helped us win," Reinfeldt said in a victory speech to jubilant supporters in downtown Stockholm.
Persson said Sweden's social model -- a market economy blended with a high-tax welfare state -- was at stake in the election. However, the opposition led by Reinfeldt's Moderate Party insisted it would not dismantle the system but help it survive by promoting jobs over welfare handouts.
The poll results showed the Moderates with 26.1 percent, a strong gain from 2002 when it won only 15 percent of the vote. After taking over the party leadership in 2003, Reinfeldt, 41, steered the party toward the center by toning down its conservative polices.
"We dared to challenge ourselves, we dared to admit our faults," Reinfeldt said. "That renewal has not just begun, it will continue into the future."
Final results were expected tomorrow, but were unlikely to change the outcome.
The Social Democrats had only 35.3 percent, which if confirmed would be the party's worst showing in parliamentary elections since 1914.
In conceding defeat, Persson, 57, said his Cabinet would resign as Reinfeldt's coalition takes office when the 349-seat Riksdag reconvenes next month.
Persson, the second longest-serving among the EU's current government leaders after Luxembourg's Prime Minister Jean-Claude Juncker, said he would also step down as party leader in March.
"We have lost the election, but we are not a defeated party," he said.
Sweden is enjoying strong economic growth -- 5 percent in the second quarter compared with the EU average of 2.8 percent -- but that did not give Persson's government the boost it expected.
Reinfeldt accused the government of failing to translate the growth into more jobs and claimed that the official statistics showing 5.7 percent unemployment were misleading. If you add people on sickness or disability leave or government job-training programs, the figure is higher than 20 percent, he said.
Reinfeldt is set to lead a majority coalition government of Moderates, Christian Democrats, the Center Party and the Liberal Party. Each of the three parties won between 6 percent and 8 percent of the vote.
"It would have been nicer if we had improved and had a better election, but the absolutely most important thing is that we're getting a new government," Liberal Party leader Lars Leijonborg said.
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