On 22 June 2026, the Council of the European Union adopted a recommendation outlining the economic, social, employment, structural and budgetary policies for Sweden. The recommendation sets maximum net expenditure growth rates of 4.4% in 2026, 4.4% in 2027, and 4.6% in 2028, with cumulative growth from 2023 reaching 15.5%, 20.6%, and 26.1% respectively. Sweden's projected net expenditure growth of 6.5% in 2026 exceeds the recommended 4.4%, a deviation of 1.0% of GDP in annual terms, though the cumulative 2024-2026 rate remains below the recommended maximum.
The recommendation is part of the European Semester cycle and builds on Sweden's medium-term fiscal-structural plan for 2025-2028, endorsed earlier by the Council. The Commission's assessment of 3 June 2026 concluded that Sweden no longer experiences macroeconomic imbalances, noting that vulnerabilities related to real estate and private debt have lessened but remain. The Council calls on Sweden to reduce incentives for household debt, notably mortgage interest deductibility, and to increase housing supply by shortening zoning and permitting lead times, building on late-2025 reforms.
On climate and energy, the Council urges further policy action to meet 2030 EU emission reduction targets, including through fuels taxation and incentives for sustainable forest management. It also recommends removing power grid and transmission constraints to deploy renewables and streamlining permitting for wind energy projects. In education, Sweden is asked to address declining basic skills and inequity by tackling the shortage of qualified teachers, especially in schools with many disadvantaged students, and building on recent reform proposals.
The recommendation impacts several stakeholders. Swedish taxpayers and consumers may face higher costs from increased fuel taxes and reduced mortgage interest deductibility, while the housing sector could benefit from streamlined permitting. The energy industry stands to gain from faster wind project approvals and grid improvements, but may face compliance costs from new climate measures. The education sector is called upon to address teacher shortages, potentially requiring increased public spending. The Council's recommendation is non-binding but carries political weight as part of the EU's economic governance framework. The next steps involve Sweden reporting on its implementation in its upcoming national reform programme and stability programme.