Some observers are focusing on the return to power of a center-left coalition after eight years in opposition, while others are freaking out over far-right gains. But the one thing that’s clear about Sweden’s election is that it was more bad news for the free-market austerians who have largely controlled Europe’s destiny of late. Here’s a measured account from the New York Times‘ David Crouch:

After eight years of a tax-cutting, free-market government, Sweden was poised on Sunday night to turn toward the center left, as a loose coalition of left-leaning parties won a slim but clear lead in parliamentary elections.

In a violent shock to Sweden’s liberal establishment, however, the far-right Sweden Democrats became the country’s third force in politics, more than doubling their share of the vote to 13 percent and setting the stage to hold the balance of power in a Parliament where the center left will struggle to build a stable majority….

On the eve of the poll, Stefan Lofven, 57, the left-leaning Social Democratic leader and likely new prime minister in the new administration, pledged to “stretch out his hand” to the smaller center-right parties to create a “strong majority” in Parliament that would deny the far right its desired role as kingmaker.

“We have had eight years of this government, and it is now time for a new direction,” he declared.

Mr. Lofven, a soft-spoken but pugnacious trade union leader with no parliamentary experience, offered Swedes an end to policies of tight money and tax cuts, promising instead to tax the banks and the better-off to fund more spending on schools, welfare and infrastructure, and to create jobs.

Sweden’s rejection of the austerity policies championed by the center right will resonate in Europe, where the European Central Bank 10 days ago slashed interest rates to record lows and promised to inject billions into financial markets in an attempt to halt the slowdown in Europe’s economy.

Bad news for Angela Merkel; worse news for David Cameron.

Ed Kilgore

Ed Kilgore is a political columnist for New York and managing editor at the Democratic Strategist website. He was a contributing writer at the Washington Monthly from January 2012 until November 2015, and was the principal contributor to the Political Animal blog.