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CONFIDENTIAL PAGE 01 STOCKH 05429 020802Z 67 ACTION EUR-12 INFO OCT-01 ISO-00 CIAE-00 DODE-00 PM-04 H-02 INR-07 L-03 NSAE-00 NSC-05 PA-01 PRS-01 SP-02 SS-15 USIA-06 ACDA-07 IO-13 EB-07 NRC-05 OES-06 ERDA-05 FEA-01 /103 W --------------------- 024139 R 011535Z OCT 76 FM AMEMBASSY STOCKHOLM TO SECSTATE WASHDC 8826 INFO AMEMBASSY COPENHAGEN AMEMBASSY HELSINKI AMEMBASSY HELSNINKI AMEMBASSY OSLO AMEMBASSY REYKJAVIK AMCONSUL GOTEBORG C O N F I D E N T I A L STOCKHOLM 5429 E.O. 11652: GDS TAGS: PINT, SW SUBJECT: SWEDISH GOVERNMENT NEGOTIATIONS CONTINUE, RESULTS EXPECTED OCTOBER 8 1. BEGIN SUMMARY. THE LADERS OF THE LIBERAL, CENTER AND MODERATE PARTIES, TOGETHER WITH THEIR CLOSEST AIDES, CONTINUE TO WORK LATE INTO THE NIGHT IN THEIR EFFORTS TO ESTABLISH A COHESIVE GOVERNMENT PROGRAM. INFORMATION ON THE PROGRESS OF THE TALKS CONTINUES TO BE VERY CLOSELY HELD, BUT SOURCES CLOSE TO THE NEGOTIATIONS INFORM US THAT THE PARTY LEADERS HAVE PASSED THE MAJOR OBSTACLE POSED BY THE NUCLEAR ENERGY ISSUE, THAT THERE WILL BE A THREE- PARTY GOVERNMENT, AND THAT DISCUSSIONS ARE PROGRESSING SATISFACTORILY. END SUMMARY. 2. THE RIKSDAG WILL OPEN ON OCTOBER 4 IN A SHORT CEREMONY WHICH WILL FOLLOW THE ELECTION OF A NEW SPEAKER, WHO WILL BE OFFICIALLY RESPONSIBLE FOR CONFIDENTIAL CONFIDENTIAL PAGE 02 STOCKH 05429 020802Z SUPERVISING THE GOVERNMENT FORMATION. IT IS EXPECTED THAT CENTER PARTY LEADER THORBJORN FALLDIN WILL BE ELECTED PRIME MINISTER LATER IN THE WEEK, AND WILL THEN OFFICIALLY PRESENT THE GOVERNMENT PROGRAM ON OCTOBER 8. PRESS REPORTS INDICATE THAT THE RIKSDAG GROUPS OF THE RESPECTIVE PARTIES WILL BE INFORMALLY BRIEFED OCTOBER 4 ON THE OUTLINE OF THE GOVERNMENT'S PROGRAM AND COMPOSITION. 3. CARL BILDT, AIDE TO MODERATE PARTY LEADER GOSTA BOYMAN, CONFIDED TO POLITICAL COUNSELOR AND EUR/NE DEPUTY DIRECTOR WOODS THAT TENTATIVE AGREEMENT HAD BEEN REACHED ON THE NUCLEAR ENERGY ISSUE, AND THAT DISCUSSION HAS TURNED TO SPECIFICS OF THE NEW GOVERNMENT. BILDT SAID HE UNDERSTOOD THAT UNDER COMPROMISE SOLUTION REACHED BY THE THREE LEADERS, TWO NEW NUCLEAR PLANTS (BARSEBACK II AND RINGHALS III) WOULD NOT BE CHARGED AT LEAST UNTIL 1978, DESPITE THE FACT THAT BARSEBACK II IS SCHEDULED TO BE LEADED THIS MONTH. NO NEW PLANTS WOULD BE CONSTRUCTED. IN ADDITION, A ROYAL COMMISSION WOULD BE APPOINTED TO STUDY ALL ASPECTS OF NUCLEAR SAFEGUARDS AND WOULD BE CHARGED TO REPORT IN TIME FOR THE 1978 MAJOR DEBATE IN THE RIKSDAG ON ENERGY POLICY. BILDT ADDED THAT THE COALITION WOULD NOT BE ADVERSE TO HOLDING APUBLIC REFERENDUM ON THE ENTIRE QUESTION OF THE FUTURE OF NUCLEAR POWER IN SWEDEN AFTER THE INVESTIGATIVE COMMISION SUBMITS ITS REPORT. 4. BILDT ALSO STATED THERE WILL IN FACT BE A THREE-PARTY GOVERNMENT, ALTHOUGH ALLOCATION OF POSITIONS AND PERCENTAGE OF REPRESENTATION WAS STILL UNDER DISCUSSION. HE STATED THAT NEW GOVERNMENT HAS EVERY CHANCE OF REMAING IN POWER AT LEAST UNTIL 1982 IF THE SOLUTION TO THE NUCLEAR PROBLEM CAN BE RECONCILED WITH THE DIFFERING PERSPECTIVES OF THE COALITION PARTNERS, WHICH HE BELIEVES IS LIKELY IF THE COMPROMISE PLAN IS IMPLEMENTED. CONFIDENTIAL CONFIDENTIAL PAGE 03 STOCKH 05429 020802Z 5. COMMENT: FALLDIN'S AGREEMENT TO THIS COMPROMISE WILL SEEM TO SOME OF HIS MORE RABID ANTI-NUCLEAR SUPPORTERS TO BE A RETREAT, THOUGH IN HIS MORE MODERATE MOMENTS IN THE CAMPAIGN HE DID INDICATE HE WOULD GO ALONG WITH THE IDEA OF AN INVESTIGATIVE COMMISSION. HE WILL THUS PROBABLY FACE SOME CRITICISM, BUT MOST SWEDES ARE LIKELY TO ACCEPT THIS SOLUTION AS MAKING THE BEST OF A BAD SITUATION. SOCIAL DEMOCRATS CAN BE EXPECTED TO ASK WHERE SWEDEN IS GOING TO GET ADEQUATE ENERGY FOR THE NEXT THREE YEARS, GIVEN THE DELAY AND POSSIBLE CANCELLATION OF NUCLEAR ENERGY EXPANSION PROGRAM. SMITH CONFIDENTIAL NNN