The Social Democrat-led red-green alliance won the election on September 14 with 43.7 percent of the votes, compared to 39.3 percent for the center-right governing alliance.

Marking the end of eight years of tax cuts and pro-market policies, Prime Minister Fredrik Reinfeldt conceded defeat on Sunday: "The election is over and the Swedish people have made their decision. We didn't make it all the way." Prime Minister Reinfeldt announced his resignation Sunday night after his party lost about 7% of the vote compared to the 2010 election.
Reinfeldt, who took office in 2006, is the longest-serving conservative prime minister in Swedish history; he will also resign as leader of the conservative party in the spring.

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It is by no means a clear victory for the Social Democrats, who had hoped for a result closer to 35 percent of the vote. Without an absolute majority, it won’t be easy to form a new government. Social Democrat leader Stefan Löfven, 57, is expected to enter into coalition talks with the Social Democrats' main partner in the red-green bloc, the environmentalist Green Party, and potentially the ex-communist Left Party.
Stefan Löfven on election night claimed he is ready to form a new government and is reaching out to all parties except the Sweden Democrats. He said in his speech that he is ready to reach out to all democratic parties and wants to avoid letting the Sweden Democrats become the balance of power in parliament.
Unless Löfven is able to recruit one of the center-right parties from Reinfeldt's alliance, the new government faces challenges in parliament.

The Sweden Democrats, wanting to reduce immigration by 90 percent, campaigned against the “mixing of cultures.” Xenophobia and racism were hot buttons on the election agenda. This year alone, the country expects up to 80,000 asylum-seekers from Syria, Eritrea, Somalia, Afghanistan, Iraq and other countries — the highest number since 1992. Sweden Democrats, now the third largest party in Sweden, are unlikely to attain their main goal of sharply reducing immigration because all the other parties are in favor of a liberal asylum policy. Moderates and the Social Democrats lost the most voters to the Sweden Democrats according to the SVT exit poll Valu. The poll provides not only the election results in the selected polling station, the interviews also show how the electorate voted in the past and other data. 29 percent of those who chose Sweden Democrats this year voted for the Moderates and 16 percent voted for the Social Democrats in the election of 2010.

Reinfeldt’s center-right Alliance has cut income and corporate taxes, abolished a tax on wealth and trimmed welfare benefits. He was praised for steering Sweden's economy through Europe's debt crisis in relatively good shape, but many Swedes worry his pro-market policies have undermined the welfare system and the value of the Swedish kronor is in jeopardy.