Palme II Cabinet 1982–1986
Single-party Social Democratic minority government on Olof Palme's return after six years of bourgeois rule. Devalued the krona by 16 % in 1982, formally introduced the wage-earner funds in 1983, and was ended by Palme's assassination on Sveavägen on 28 February 1986.
The Palme II Cabinet, headed by Olof Palme, returned Socialdemokraterna to office on 8 October 1982 after six years of bourgeois rule under the three Fälldin cabinets and the Ullsten interregnum. It was a single-party SAP minority government governing through case-by-case Riksdag support — most often from VPK on the left.
Its economic mark was made within weeks: a 16 % “super-devaluation” of the krona designed to restore private-sector profitability and exports — the centrepiece of the tredje vägen (“third way”) strategy that combined currency-driven competitiveness with a partial restoration of the welfare-state machinery. In 1983 the cabinet formally introduced the wage-earner funds (löntagarfonder), the most polarising reform of the decade and the trigger of an unprecedented 100,000-strong business-community protest in central Stockholm on 4 October 1983. The same period absorbed the 1982 Hårsfjärden submarine incident, when the Swedish navy trapped and depth-charged an unidentified foreign submarine in waters near Stockholm.
The cabinet did not end on a vote. On the night of 28 February 1986 Palme was shot at close range while walking home from a cinema on Sveavägen. The premiership passed within hours to vice prime minister Ingvar Carlsson, who constituted the Carlsson I cabinet the next day. The assassination — recorded in the public inquiry SOU 1999:88 and formally unsolved — still organises how Sweden remembers the politics of the 1980s.