Sweden's far right party says it won the arguments. Now it wants a share of power

By Johan Ahlander

STOCKHOLM, July 23 (Reuters) - After championing huge policy shifts in Sweden by propping up a minority centre-right government for four years, the far-right Sweden Democrats say they have won the political arguments and now deserve a share of power for themselves.

But it is a demand that could prove a step too far for voters in an election in September, and potentially bring down Prime Minister Ulf Kristersson. The prime minister, who once told a Holocaust survivor he would never cooperate with the Sweden Democrats, now says he has lifted those "red lines".

Sweden, the stalwart of European socialism for generations, has undergone a startling rightward shift in policy and public opinion in recent years, especially over immigration in a country where one person in five was born abroad.

The number of asylum seekers last year was down 97% from the peak a decade ago. One of Europe's most welcoming immigration systems has become one of its most stringent: newcomers face employment restrictions, language and culture tests, and reduced welfare payouts. Immigrants who break the law can be swiftly expelled, and others are offered payments to leave voluntarily.

The changes were all championed by the Sweden Democrats, who spent the past four years providing 73 votes in the 349-seat Riksdag to support the centre-right government from outside Kristersson's coalition.

Party leader Jimmie Akesson says that arrangement has run its course, and his party must now become a full-blown member of the coalition, controlling most of the key ministries in the cabinet if the right wins the vote.

"It's been a clear demand from us ahead of this election. Either we are in government or we are in opposition," Akesson told Reuters in an interview. "We have shown that we can cooperate, it has gone better than most people expected."

After the election, the Sweden Democrats expect to control at least three of the most powerful ministries — justice, defence, foreign affairs or finance, Akesson said.

"I think that is reasonable if you look at the balance of power within our bloc," he said. He would allow Kristersson to remain as prime minister, he added: "I can do without travelling around the world and shaking hands."

ONCE OSTRACISED

The Sweden Democrats were once ostracised by all of Sweden's mainstream parties, including Kristersson's main centre-right Moderates.

But at a joint press conference with Akesson in April, the prime minister officially lifted the taboo: "We have done away with red lines that can limit our cooperation and want to form a stable majority government after the election," he announced. "That's a strength for Sweden."

Voters so far appear unconvinced. A major poll in June showed support for the governing bloc including the Sweden Democrats at just 42.6%, with the loosely aligned centre-left opposition led by the Social Democrats receiving 55.2%.

"Kristersson is caught between a rock and a hard place. He can't form a government without the Sweden Democrats, but they might also scare off too many voters," said Gothenburg University Political Science Professor Jonas Hinnfors.

Winning Kristersson's public acceptance was "a monumental journey" for the Sweden Democrats, Hinnfors said. "They weren't just a small party, they were also a taboo party, a pariah party that no one wanted to touch with pliers."

NEO-NAZI ROOTS

The Sweden Democrats acknowledge that some members had roots in neo-Nazism and white supremacy when the party was founded in the 1980s, but say such figures have since been weeded out.

Akesson, 47, joined the party in the 1990s and became party leader in 2005. Since then, he has pushed relentlessly for mainstream acceptance. A keyboardist in a Viking rock band, he cultivates an informal persona and is usually seen in a suit without a tie.

The rise of the Sweden Democrats has forced other parties to alter their positions, especially on immigration and crime. In 2015, when more than a million asylum seekers entered Europe mainly from Syria, Sweden proudly took in more per capita than any other EU country, with Prime Minister Stefan Lofven, a Social Democrat, saying his Europe "didn't build walls".

Now, with policy having shifted and the numbers of new immigrants having already plummeted, the Sweden Democrats' focus has shifted toward demands that the existing foreign-born population espouse Swedish values, language and customs.

The party calls for banning traditional Islamic dress for women, tearing down mosques that preach Islamic radicalism, increasing expulsions and raising financial incentives for those who leave voluntarily.

"We want the complete abolition of multiculturalism," said Mattias Karlsson, seen as the party's chief ideologist.

While opinion polls suggest support for the Sweden Democrats remains fairly steady at around a fifth of the electorate, the agreement to allow them into a future government has hurt other parties in Kristersson's coalition.

The Liberals, who now provide the ruling coalition with 16 seats, saw several high-profile representatives quit and the party's support fall below the 4% threshold needed to win seats.

The Sweden Democrats' "values are as far from mine as possible. To be in government with them is unthinkable," said Liberal lawmaker Malin Sjoberg Hogrell, who quit her party's governing board and announced she would not seek re-election to parliament.

Opposition parties say Kristersson's deal with the Sweden Democrats means the only way to keep the far right out of power is now to vote for the left.

"Kristersson would be the weakest prime minister in Sweden's history," Social Democrat leader Magdalena Andersson told a news conference. "That government would only last until the day Jimmie Akesson decides it's time for him to become prime minister."

(Reporting by Johan AhlanderEditing by Niklas Pollard and Peter Graff)