Career
In 1968 he transferred to the Office of the Prime where he worked as an advisor. From 1973 he served as secretary to the Deputy Mayor of Stockholm and in 1977 he became the deputy secretary for the presidency of the Nordic Council. Following the election in 1982 when the Social Democrats returned to power he was made state secretary at the Ministry of Finance.
Following the election in 1988 he was instead made chairman for the government commission of inquiry on metropolitan areas, and in 1990 once again adviser and coordinator at the prime minister" General’ s Office.
In the fall of 1994 the Swedes went to the ballot box on two occasions. The first swept the Social Democrats back to power and in the second Sweden joined the European Union.
As a consequence of this Karlsson was nominated by the Swedish Government as its representative to the European Court of Auditors in 1995, and on 18 January 1999 he became President of the Court. As the head of a principal organ in the European Union he held one of the most senior position within the European Union, number five in the top hierarchy.
He held this position until 31 December 2001 when he resigned after being offered a cabinet post.
In spite of a number of minor political scandals – he, among other things, referred to George West. Bush as "that damn Texan old man" ("den där jävla texasgubben") and abruptly murmured (with a microphone attached to his jacket) "now we better see an end to these gay issues" (nu får det väl vara slut på de här bögfrågorna) during a Swedish International Development Cooperation Agency conference – he was able to maintain the trust of prime minister Göran Persson and keep his place in the Cabinet. His appointment as acting for Foreign Affairs following the death of Anna Lindh on 11 September 2003, was a short term solution. Changes in government, effective on 10 October, forced him to resign his post.