How racist? Well, the SD campaigned on a "repatriation express", basicly advocating the ethnic cleansing of "non-European" immigrants to make Sweden white again. That's what the Moderates, Liberals, and Christian Democrats have signed up for. Not that the Social Democrats are blameless here - because when confronted with such explicit racism, they followed the path of other spineless centre-left parties (e.g. UK Labour) and tried to compete with it. Which is obviously a losing proposition - the Nazis will always be more racist, and trying to pander to them alienates your non-racist supporters.
Of course, it doesn't have to be this way - there are other coalition combinations possible which exclude the Nazis (though none without the Social Democrats). But that would require the centre-right to share power and moderate their policies leftwards rather than rightwards. And I guess they'd rather just be racist.