Swedish prime minister claims victory in elections

STOCKHOLM (CNN) -- Prime Minister Goran Persson claimed victory in Sweden's general election on Sunday, although his Social Democratic Party (SDP) showed one of its worst election performances this century as voters swung to the left.

"We are going to continue governing," Persson told 200 cheering supporters after his party and other left-leaning parties secured a majority of the votes.

With most of the vote counted, the left-of-center SDP remained the biggest of seven parliamentary parties with 36.5 percent support -- although this was the SDP's worst result since the 1920s, and down from 45.3 percent at the last general election in 1994.

"The SDP had a very bad result but this shows people want more justice, more fairness and more money spent on the public sector," SDP party secretary Ingela Thalen said.

"It is clear from this that people are going to the left."

Low voter turnout

Thalen said a big disappointment of the election was the voter turnout, which at 79.5 percent was well below historic Swedish standards.

Swedish Television correspondent Annbritt Peterson told CNN that some voters are "fed up" with the politicians in this election.

"Some voters think the politicians should have talked more about unemployment, hospitals and schools -- traditional Swedish issues," Peterson said. "Instead, it was too much about the economy."

Persson must rally smaller parties

Persson now must rally the support of some of the smaller parties to ensure a viable continuation of his minority government.

The most likely partnership is with the ex-communist Left Party, which seems to have benefited from a swing away from the SDP, which has ruled Sweden for 56 of the past 67 years.

"We need support, clearly this is primarily from the Left Party and the Green Party, who said so clearly in the election campaign where they stood," Persson told a news conference.

Support for the Left Party, led by the popular Gudrun Schyman, has almost doubled since 1994 to 12 percent.

However, this possible alliance has sent jitters through the financial markets in recent weeks, causing the Swedish crown currency to weaken on foreign exchange markets.

Prudent budget weakens support

The SDP has campaigned on improving welfare services and cutting unemployment, but it also has a prudent budget policy -- which is cited as a key reason for its weakened support.

The Left, however, wants to cut the work week to 35 hours, increase welfare spending, delay repayment of the state debt and pull Sweden out of the European Union.

"We'll have to sit down with the Social Democrats, and we hope we get enough support together to build stable policies for the whole mandate period," Schyman told Swedish Television.

She said her party was not demanding cabinet seats.

The environmentalist Greens, with 4.4 percent of the vote, had also voiced interest in working with the SDP.

Opposition leader Carl Bildt, the former Bosnia mediator whose Moderate Party heads a non-socialist bloc, said Persson had no choice but to rely on support from the left parties to retain power in parliament.

"The question is whether he will manage just with Schyman or whether he also has to cooperate with (the Greens)," Bildt said.

But in any feasible scenario, Bildt will be unable to muster the absolute majority needed under Swedish parliamentary rules to oust Persson.

The four center-right parties combined garnered about 44 percent of the votes after counting was completed in 5,924 of Sweden's 6,109 electoral districts. Some of the center-right parties could opt to support the SDP.

Moderates campaigned for tax cuts

The Moderates secured 22.7 percent of the vote against 22.4 percent of the national vote in 1994.

Bildt campaigned for tax cuts to create jobs and tackle unemployment of 7.3 percent, but clearly many Swedes thought this would be at the expense of generous welfare provisions.

He also pledged to work to link Sweden to Europe's single currency.

Reuters contributed to this report.