European Commission
Europe 2020

Country-specific Recommendations

The Country-specific Recommendations are documents prepared by the European Commission for each country, analysing its economic situation and providing recommendations on measures it should adopt over the coming 18 months. They are tailored to the particular issues the Member State is facing and cover a broad range of topics: the state of public finances, reforms of pension systems, measures to create jobs and to fight unemployment, education and innovation challenges, etc. The final adoption of Country-specific Recommendations prepared by the Commission is done at the highest level by national leaders in the European Council.

Proposed recommendations for Sweden 2012

In 2012, the Swedish economy is expected to slow down as compared to 2011, with a foreseen GDP growth of 0.3%. After positive labour market developments in 2011, unemployment is expected to rise slightly to 7.7% in 2012.

The performance of the Swedish economy is overall very good. Since the mid-1990s, Sweden has followed an ambitious agenda of fiscal and structural reform. Most recently, the reform efforts have focused on achieving full employment, ensuring a strong and stable financial sector, improving the functioning of the housing market, reforming the education system, promoting innovative and dynamic businesses and tackling the environmental and climate change issues.

However, several challenges still need to be tackled. Notwithstanding government measures in the area of the labour market integration of vulnerable groups, the unemployment rates of these groups remain high. While the housing market has cooled somewhat since mid-2011, several structural distortions persist that have contributed to house-price volatility in the past. Certain aspects of the Swedish tax system could be made more effective, efficient and growth-enhancing. Moreover, Sweden's competitive position is threatened in the medium term by falling business investment in R&D and inadequate commercialisation of innovative output.

Overview of recommendations

1. Preserve a sound fiscal position in 2012 and beyond by implementing the budgetary strategy as envisaged and ensuring continued achievement of the medium-term budgetary objective, including meeting the expenditure benchmark.
   More information on Sweden's economy
2. Take further preventive measures to strengthen the stability of the housing and mortgage market in the medium term, including by fostering prudent lending, reducing the debt bias in the financing of housing investments, and tackling constraints in housing supply and rent regulations.
3. Take further measures to improve the labour market participation of youth and vulnerable groups by focusing on effective active labour market policy measures, encouraging increased wage flexibility, notably at the lower end of the wage scale, and reviewing selected aspects of employment protection legislation like trial periods to ease the transition to permanent employment. Review the effectiveness of the current reduced VAT rate for restaurants and catering services in support of job creation.
   More information on EU tax policy strategy and  EU employment strategy
4. Focus the upcoming research and innovation bill on measures to improve the commercialisation of innovative products and the development of new technologies to support high-growth innovative firms.
   More information on innovation for growth

See how Sweden compares with other EU Member States in key areas

European Semester Documents