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On the surface, it was another boring Swedish election. The most dramatic possible outcome from Sunday’s vote would be a shift from the governing centre-left coalition – which has billed itself “the world’s first feminist government” – to a centre-right coalition with mildly different policies. And, with results evenly divided between the two blocs, even that shift might not happen.

That was not the reason why the world was watching so closely. Burbling beneath the surface of this Scandinavian election, provoking reactions of fear and anxiety across Europe, was an ominous political party that won’t be permitted to join any governing coalition.

The Sweden Democrats, a former neo-Nazi party that ran a nearly single-issue campaign against racial and religious minorities, non-white immigrants and European integration, has been on the rise, capitalizing on angry Scandinavian responses to immigration and crime. On Sunday morning, it appeared poised to become the second-largest party in this prosperous country – the latest in a series of shocking returns across Europe for parties whose views would have been almost unmentionable a generation ago.

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Once votes were counted Sunday night, the threat appeared slightly less ominous: The Sweden Democrats remained in third place, capturing 17.6 per cent of the vote (and therefore, under proportional-representation rules, 62 seats in the 349-seat parliament), remaining outranked by the traditionally dominant Social Democrats (with 28.4 per cent, their lowest return in a century) and the centre-right Moderates (with 19.8 per cent) – both of which now control around 143 seats in their multiparty coalitions. That means that whoever governs Sweden will need to include at least one party from the opposing coalition, both having vowed never to govern alongside the Sweden Democrats. The coalition-formation negotiations are likely to take weeks.

But that 17.6 per cent still represents a 4.6 point rise over the Sweden Democrats’ 2014 results – making it one of many European race-hatred parties that has slowly increased power and clout over the last decade. In Hungary, Poland and Italy, parties of the far right now govern. And it means that Sweden now joins France and Denmark among countries where around a fifth of voters see nothing wrong with routinely casting a ballot for a party of intolerance.

That makes Sweden – a country experiencing an economic boom and low unemployment – a surprising test case for two dominant theories of what has happened to European politics.

One theory holds that far-right parties such as the Sweden Democrats are not so much profiting from the success of their own ideas, as they are products of the gradual decay and obsolescence of the Western world's big, monolithic moderate right and left-wing parties.

Until the end of the 1990s, most developed countries were dominated by two big parties, one social-democratic or liberal, the other moderately conservative. Until 1998, nearly 70 per cent of Swedes reliably voted for either the Social Democrats or the Moderates; that number drifted down to 60 per cent in the 2000s, to 54 per cent in 2014 – and on Sunday for the first time fell below half, to just more than 48 per cent.

It's not just far-right parties gaining from this fragmentation of the mainstream giants. Sunday's vote also saw support for Sweden's Left Party, a former fringe party with its roots in communism, increase to 7.9 per cent of the vote from 5.7 per cent in 2017 – an even larger rise than the Sweden Democrats. A number of other smaller parties also saw increases.

"Compared to the last election, most but not all smaller parties – Left Party, Christian Democrats, Centre and Liberal – are up a few points. This again points to fragmentation, a story playing out in many other democracies in Europe," said Matthew Goodwin, a political scientist with London’s Chatham House who studies the politics of right-wing populism. "The decline of social democracy in Europe continues."

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The other theory holds that the surge in far-right support, in otherwise moderate countries such as Sweden, is a one-time response to current events – especially to the surge in migrants and refugee claimants who entered Europe in 2015 and 2016 amid the Syrian civil war. Sweden accepted more than 160,000 refugees during that period – far fewer than Germany's million-plus refugees, but a strain on Sweden, whose immigration system mainly relies on asylum (and does not permit refugees to work).

Sweden has also seen a rise in gang crime and rioting this year in its low-income housing projects – which, while only some of their residents are refugees and minorities, were easy for the Sweden Democrats to capitalize upon, backed by a tabloid media willing to demonize Muslims and Middle Easterners.

In this view, the Sweden Democrats and their ilk may have peaked. But the other theory holds that they will continue to grow, bolstered by a loss of faith in mainstream politics that's been underway for decades, even in comfortable Sweden.

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