The aim of this chapter is to challenge an axiomatic assumption made in current public debates, namely that the sustainability of the welfare state in an age of globalization requires the imposition of limits on immigration. With a particular focus on Sweden and recent changes of Swedish welfare policy, the chapter shows how the current crisis of the Swedish welfare model has in fact haunted this model for decades. The argument presented is that the socially-integrative capacities of the Swedish model had been compromised well before the start of the post-2015 refugee crisis in Europe. The argument made is that it was not the scale of immigration that made the Swedish welfare state unsustainable. Rather, it is the austerity-driven retrenchment of the Swedish welfare state that, in the past quarter of a century, has steadily undermined the capacity of the welfare model to offer emancipatory and non-discriminatory pathways of incorporation to immigrants. With the neoliberal reforms implemented since the early 1990s, the current reality in Sweden is that of deepening, and increasingly ethnically tinged, class divisions and long-term social exclusion of sizeable population groups from substantial citizenship rights.