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| dossier | COM(2024)627 - . |
|---|---|
| bron | COM(2024)627 |
| datum | 19-06-2024 |
COUNCIL RECOMMENDATION
on the economic, social, employment, structural and budgetary policies of Sweden
THE COUNCIL OF THE EUROPEAN UNION,
Having regard to the Treaty on the Functioning of the European Union, and in particular Articles 121(2) and 148 i thereof,
Having regard to Council Regulation (EU) 2024/1263 of 29 April 2024 on the effective coordination of economic policies and multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/971, and in particular Article 3(3) thereof,
Having regard to Regulation (EU) No 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances2, and in particular Article 6(1) thereof,
Having regard to the recommendation of the European Commission,
Having regard to the resolutions of the European Parliament,
Having regard to the conclusions of the European Council,
Having regard to the opinion of the Employment Committee,
Having regard to the opinion of the Economic and Financial Committee,
Having regard to the opinion of the Social Protection Committee,
Having regard to the opinion of the Economic Policy Committee,
Regulation (EU) 2021/241 of the European Parliament and of the Council3, which established the Recovery and Resilience Facility, entered into force on 19 February 2021. The Recovery and Resilience Facility provides financial support to the Member States for the implementation of reforms and investment, entailing a fiscal impulse financed by the EU. In line with the European Semester priorities, it helps achieve the economic and social recovery and implement sustainable reforms and investment, in particular to promote the green and digital transitions and make the Member States’ economies more resilient. It also helps strengthen public finances and boost growth and job creation in the medium and long term, improve territorial cohesion within the EU and support the continued implementation of the European Pillar of Social Rights.
The REPowerEU Regulation4, adopted on 27 February 2023, aims to phase out the EU’s dependency on Russian fossil fuel imports. This would help achieve energy security and diversify the EU’s energy supply, while increasing the uptake of renewables, energy storage capacities and energy efficiency. Sweden added a new REPowerEU chapter to its national recovery and resilience plan in order to finance key reforms and investments that will help achieve the REPowerEU objectives.
On 16 March 2023, the Commission issued a Communication on the ‘Long-term competitiveness of the EU: looking beyond 2030’5, in order to inform policy decisions and create the framework conditions for increasing growth. The Communication frames competitiveness along nine mutually reinforcing drivers. Among these drivers, access to private capital, research and innovation, education and skills, and the single market emerge as paramount policy priorities for reform and investment to address current productivity challenges as well as to build up the long-term competitiveness of the EU and its Member States On 14 February 2024, the Commission followed this Communication with the Annual Single Market and Competitiveness Report6. The report details the competitive strengths and challenges of Europe's Single Market, tracking yearly developments according to the nine competitiveness drivers identified.
On 21 November 2023, the Commission adopted the 2024 Annual Sustainable Growth Survey7, marking the start of the 2024 cycle of the European Semester for economic policy coordination. The European Council endorsed the priorities of the survey around the four dimensions of competitive sustainability on 22 March 2024. On 21 November 2023, on the basis of Regulation (EU) No 1176/2011, the Commission also adopted the 2024 Alert Mechanism Report, in which it identified Sweden as one of the Member States that may be affected or may be at risk of being affected by imbalances, and for which an in-depth review would be needed. The Commission also adopted a recommendation for a Council recommendation on the economic policy of the euro area, which the Council adopted on 12 April 2024, as well as the proposal for the 2024 Joint Employment Report analysing the implementation of the Employment Guidelines and the principles of the European Pillar of Social Rights, which the Council adopted on 11 March 2024.
On 30 April 2024, the EU’s new economic governance framework came into force. The framework includes the new Regulation of the European Parliament and of the Council (EU) 2024/1263 on the effective coordination of economic policies and multilateral budgetary surveillance and repealing Council Regulation (EC) No 1466/97. It also includes the amended Regulation (EC) No 1467/97 on the implementation of the excessive deficit procedure and the amended Directive 2011/85/EU on the budgetary frameworks of Member States8. The objectives of the new framework are public debt sustainability and sustainable and inclusive growth through gradual fiscal consolidation as well as reforms and investments. It promotes national ownership and has a greater medium-term focus, combined with more effective and coherent enforcement. Each Member State should submit to the Council and to the Commission a national medium-term fiscal-structural plan. National medium-term fiscal-structural plans contain the fiscal, reform and investment commitments of a Member State, covering a planning horizon of 4 years or 5 years depending on the regular length of the national legislature. The net expenditure9 path in the national medium-term fiscal-structural plans should comply with the requirements of Regulation (EU) 2024/1263, including the requirements to put or keep general government debt on a plausibly downward path by the end of the adjustment period at the latest, or for it to remain at prudent levels below 60% of GDP, and to bring and/or maintain the government deficit below the 3% of GDP reference value over the medium term. Where a Member State commits to a relevant set of reforms and investments in accordance with the criteria set out in Regulation (EU) 2024/1263, the adjustment period may be extended by 3 years at most. For the purpose of supporting the preparation of those plans, on [21 June] 2024, the Commission is set to provide Member States with guidance on the content of the plans and the subsequent annual progress reports that they will need to submit and, in accordance with Article 5 of Regulation (EU) 2024/1263, will transmit to them technical guidance on the fiscal adjustments (reference trajectories and technical information, where applicable). Member States should submit their medium-term fiscal-structural plans by 20 September 2024, unless the Member State and the Commission agree to extend the deadline by a reasonable period of time. Member States should ensure the involvement of their national parliaments, and the consultation of independent fiscal institutions, of social partners and other national stakeholders, as appropriate.
In 2024, the European Semester for economic policy coordination continues to evolve in line with the implementation of the Recovery and Resilience Facility. The full implementation of the recovery and resilience plans remains essential for delivering the policy priorities under the European Semester, as the plans help effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations issued in recent years. The 2019, 2020, 2022 and 2023 country-specific recommendations remain equally relevant also for recovery and resilience plans revised, updated or amended in accordance with Articles 14, 18 and 21 of Regulation (EU) 2021/241.
On 28 May 2021, Sweden submitted its national recovery and resilience plan to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. Pursuant to Article 19 of Regulation (EU) 2021/241, the Commission assessed the relevance, effectiveness, efficiency and coherence of the recovery and resilience plan, in accordance with the assessment guidelines of Annex V to that Regulation. On 4 May 2022, the Council adopted its Decision on the approval of the assessment of the recovery and resilience plan for Sweden10, which was amended on 9 November 2023 following Article 11(2) of Regulation (EU) 2021/241 on the update of the maximum financial contribution for non-repayable financial support, as well as to include the REPowerEU chapter11. The release of instalments is conditional on a decision by the Commission, taken in accordance with Article 24(5) of Regulation (EU) 2021/241, that Sweden has satisfactorily fulfilled the relevant milestones and targets set out in the Council Implementing Decision. Satisfactory fulfilment presupposes that the achievement of preceding milestones and targets has not been reversed.
On 26 April 2024, Sweden submitted its 2024 National Reform Programme and its 2024 Convergence Programme, in line with Article 8(1) of Regulation (EC) No 1466/97. In accordance with Article 27 of Regulation (EU) 2021/241, the 2024 National Reform Programme also reflects Sweden’s biannual reporting on the progress made in achieving its recovery and resilience plan.
The Commission published the 2024 country report for Sweden12 on 19 June 2024. It assessed Sweden’s progress in addressing the relevant country-specific recommendations adopted by the Council between 2019 and 2023 and took stock of Sweden’s implementation of the recovery and resilience plan. Based on this analysis, the country report identified gaps with respect to those challenges that are not addressed or only partially addressed by the recovery and resilience plan, as well as new and emerging challenges. It also assessed Sweden’s progress on implementing the European Pillar of Social Rights and on achieving the EU headline targets on employment, skills and poverty reduction, as well as progress in achieving the UN’s Sustainable Development Goals.
The Commission carried out an in-depth review under Article 5 of Regulation (EU) No 1176/2011 for Sweden. The main findings of the Commission staff’s assessment of macroeconomic vulnerabilities for Sweden for the purposes of that Regulation were published in March 202413. On 19 June 2024, the Commission concluded that Sweden is experiencing macroeconomic imbalances. In particular, Sweden faces vulnerabilities related to its real estate market and high private debt, which remain relevant despite some recent correction, and policy action to tackle them has been limited. After significant increases for several years, real estate prices have been declining since late 2022. Private sector debt declined relative to GDP because of the high nominal GDP growth, on account of the high inflation, while debt levels still increased in nominal terms. The rapid increase in interest rates has negatively impacted the debt service of households and of commercial real estate companies, reduced demand, and affected property prices. The prevalence of variable interest rates and of mortgages with very long durations, has put pressure on household balance sheets, reducing repayment capacity and triggering a fall in consumption and contributing to the recession of 2023. At the same time, the new housing construction dropped sharply. Despite recent falls, house prices continue to still be significantly overvalued; commercial real estate prices also appear not to have adjusted fully yet and there are risks for debt servicing if interest rates remain high and valuations decline. The financial sector is highly exposed to the real estate sector, but its strong metrics should serve as a bulwark against the propagation of real estate problems to the wider economy. Policy progress has been limited, and in the absence of firmer action, the identified vulnerabilities will persist and may lead to a re-surge in debt-financed housing acquisition and house price overvaluation. Measures that increase housing supply could go a long way in preventing these issues. In addition, taxation continues to promote debt-financed housing acquisition through the significant tax deductibility of mortgage interest payments and to favour homeownership. The rental market has not been reformed.
Based on data validated by Eurostat14, Sweden’s general government balance decreased from a surplus of 1.2% of GDP in 2022 to a deficit of 0.6% in 2023, while the general government debt fell from 33.2% of GDP at the end of 2022 to 31.2% at the end of 2023.
On 12 July 2022, the Council recommended15 that Sweden take action to ensure in 2023 that the growth of nationally financed primary current expenditure is in line with an overall neutral policy stance16, taking into account continued temporary and targeted support to households and firms most vulnerable to energy price hikes and to people fleeing Ukraine. Sweden should stand ready to adjust current spending to the evolving situation. Sweden was also recommended to expand public investment for the green and digital transitions, and for energy security taking into account the REPowerEU initiative, including by making use of the Recovery and Resilience Facility and other Union funds. In 2023, according to the Commission estimates, the fiscal stance17 was broadly neutral, at 0% of GDP. The growth in nationally financed primary current expenditure (net of discretionary revenue measures) in 2023 provided a broadly neutral contribution to the fiscal stance of 0.1% of GDP and was in line with the Council recommendation. The broadly neutral contribution of nationally financed primary current expenditure was due to the reduction of the emergency support measures (targeted and untargeted) to households and firms in response to energy price hikes (by 0.3 percentage points of GDP), partly offset by a series of smaller measures, inter alia a reduction of the energy tax on fuel. Nationally financed investment amounted to 4.9% of GDP in 2023, with an increase of 0.2 percentage points from 2022. Sweden financed public investment for the green and digital transitions, and for energy security, such as the Industry leap and Climate leap schemes, providing funding for climate projects and low-emission technology in industries, and investment in broadband expansion. Sweden has not yet submitted a payment request under the Recovery and Resilience Facility.
The key projections in the 2024 Convergence Programme can be summarised as follows. The macroeconomic scenario underpinning the budgetary projections foresees real GDP growth at 0.7% in 2024 and 2.5% in 2025, while it projects KPIF (consumer price inflation without interest costs) inflation at 2.1% in 2024 and 1.7% in 2025. The general government deficit is expected to increase to 1.2% of GDP in 2024 and decline to 0.3% of GDP in 2025, while the general government debt-to-GDP ratio is set to increase to 32.0% by the end of 2024 and, subsequently, decrease to 31.4% by the end of 2025. After 2025, the general government balance is projected to reach a surplus of 0.7% of GDP in 2026 and 1.7% in 2027. Therefore, the general government balance is planned to remain below the 3% of GDP deficit reference value over the programme horizon. In turn, after 2025, the general government debt-to-GDP is projected to decrease to 30.0% in 2026 and to 28.0% in 2027.
The Commission Spring 2024 Forecast projects real GDP to grow by 0.2% in 2024 and 2.1% in 2025, and HICP inflation to stand at 2.0% in 2024 and 1.8% in 2025.
The Commission Spring 2024 Forecast projects a government deficit of 1.4% of GDP in 2024, reflecting inter alia weakening growth in tax revenue and increased expenditure in particular on index-linked pensions in the regional and municipal subsector, while the general government debt-to-GDP ratio is set to increase to 32% by the end of 2024. Based on the Commission’s estimates, the fiscal stance is projected to be expansionary by 0.6% of GDP in 2024.
Expenditure amounting to 0.1% of GDP is expected to be financed by non-repayable support (“grants”) from the Recovery and Resilience Facility in 2024, compared to 0.1% of GDP in 2023, according to the Commission Spring 2024 Forecast. Expenditure financed by Recovery and Resilience Facility grants will enable high-quality investment and productivity-enhancing reforms without a direct impact on the general government balance and debt of Sweden.
On 14 July 2023, the Council recommended18 that Sweden maintain a sound fiscal position in 2024.. When executing their 2023 budgets and preparing their budgets for 2024, Member States were invited to take into account that the Commission would propose to the Council the opening of deficit-based excessive deficit procedures based on the outturn data for 2023. According to the Commission Spring 2024 Forecast, Sweden’s structural balance is projected at 0.0% of GDP in 2024, from 0.1% in 2023, thereby above the country’s medium-term budgetary objective (MTO) of a structural balance of -1% of GDP. This is in line with what was recommended by the Council.
(18) Moreover, the Council recommended that Sweden take action to wind down the emergency energy support measures in force as soon as possible in 2023 and 2024. The Council further specified that, should renewed energy price increases necessitate new or continued support measures, Sweden should ensure that these were targeted at protecting vulnerable households and firms, fiscally affordable, and preserve incentives for energy savings. According to the Commission Spring 2024 Forecast, the net budgetary cost19 of emergency energy support measures is estimated at less than 0.1% of GDP in 2023 and projected at less than 0.1% in 2024 and 0% in 2025. The emergency energy support measures are projected to be wound down as soon as possible in 2023 and 2024. This is in line with what was recommended by the Council.
In addition, the Council also recommended that Sweden preserve nationally financed public investment and ensure the effective absorption of Recovery and Resilience Facility grants and other EU funds, in particular to foster the green and digital transitions. According to the Commission Spring 2024 Forecast, nationally financed public investment is projected to increase to 5.1% of GDP in 2024 from 4.9% of GDP in 2023. This is in line with what was recommended by the Council. In turn, public expenditure financed from revenues from EU funds, including Recovery and Resilience Facility grants, is expected to remain stable at 0.2% of GDP in 2024.
Based on policy measures known at the cut-off date of the forecast and on a no-policy-change assumption, the Commission Spring 2024 Forecast projects, for 2025, a general government deficit of 0.9% of GDP and a general government debt-to-GDP ratio of 31.3%, on the back of the expected economic recovery.
(21) In accordance with Article 19(3), point (b), and Annex V, criterion 2.2 of Regulation (EU) 2021/241, the recovery and resilience plan includes an extensive set of mutually reinforcing reforms and investments to be implemented by 2026. These are expected to help effectively address all or a significant subset of challenges identified in the relevant country-specific recommendations. Within this tight timeframe, proceeding swiftly with the effective implementation of the plan, including the REPowerEU chapter, is essential to boost Sweden’s long-term competitiveness through the green and digital transition, while ensuring social fairness. To deliver on the commitments of the plan by August 2026, it is essential for Sweden to significantly accelerate the implementation of reforms and investments. The systematic involvement of local and regional authorities, social partners, civil society and other relevant stakeholders remains essential to ensure broad ownership for the successful implementation of the recovery and resilience plan.
As part of the mid-term review of the cohesion policy funds, in accordance with Article 18 of Regulation (EU) 2021/1060, Sweden is required to review each programme by March 2025, taking into account, among other things, the challenges identified in the 2024 country-specific recommendations, as well as its national energy and climate plan. This review forms the basis for the definitive allocation of the EU funding included in each programme. Sweden has made progress in implementing cohesion policy and the European Pillar of Social Rights, but challenges remain and disparities persist between the capital region and the rest of the country. It is important to accelerate cohesion policy implementation, and the priorities agreed in the programmes are still relevant. It is crucial to continue to support innovation contributing to the further greening of society with the ambition of reaching a climate-neutral economy, while continuing to address socio-economic regional disparities and disparities between urban and non-urban areas. In addition, it remains key to promote upskilling and reskilling, with particular attention to vulnerable groups, in particular to those with a migrant background. Sweden could also make use of the Strategic Technologies for Europe Platform initiative to boost investments in technologies supporting the green transition. Developing and manufacturing clean and resource-efficient technologies, including strengthening value chains and addressing shortages of labour and skills, is important for the long‑term sustainability and competitiveness of Swedish regions and their small to medium-sized enterprises.
Beyond the economic and social challenges addressed by the recovery and resilience plan and other EU funds, Sweden faces several additional challenges related to: (i) deteriorating educational outcomes of pupils, in particular those with disadvantaged socio-economic and migrant backgrounds; (ii) skills gaps, which are most pronounced for people from disadvantaged socio-economic and migrant backgrounds; and (iii) reducing greenhouse gas emissions.
Based on the 2022 Programme for International Student Assessment (PISA) results, the basic skills of Swedish students have deteriorated since 2018. The largest deterioration has taken place in mathematics, where the share of underperformers was well above the EU target. The underperformance rate has increased even more for students from disadvantaged socio-economic backgrounds, and the gap between native-born students and those with a migrant background, is very high. Furthermore, the persistent shortage of qualified teachers risks to negatively impact the quality of the education system and the performance of students.
In 2022, 15% of all students finishing lower secondary school had grades that were too low or incomplete, excluding them from qualifying for upper secondary school. This affects in particular students with a disadvantaged socio-economic and migrant background as many fail to qualify for upper secondary education. This group is also underrepresented in private schools, whose pupils have on average better chances of qualifying for further studies. As most jobs in Sweden require an upper secondary or higher qualification, the ensuing gap in educational attainment also increases the risk of not finding a job, with negative consequences for integration.
There are wide gaps between different groups in terms of skills levels and educational attainment. These gaps are most pronounced for young people born outside the EU, who are less likely to have completed upper secondary school and less likely to be in employment, education or training than those born in Sweden. This reduces their chances of employment and represents a risk for Sweden’s ability to further improve its sustainable competitiveness. Furthermore, these skills gaps further aggravate labour shortages, which are especially evident in the industry and services sectors, and represent a major challenge for the development and the green industrial transition of the country’s northernmost regions.
With the current policies, it appears unlikely that Sweden will reach its 2030 targets under the EU’s policy to reduce greenhouse gas emissions. Updated comprehensive scenarios for greenhouse gas emissions reflecting policy changes in 2023 and 2024 are still lacking, as the currently available government climate action plan focuses on a longer horizon until 2045, without quantitative scenarios on emissions trajectories for the period to 2030. However, several studies by official and independent bodies seem to confirm that Sweden’s current policies will result in a significant shortfall to the EU’s 2030 greenhouse gas emission targets. Emission reductions in road transport are key if Sweden is to achieve its 2030 targets under the EU’s policy to reduce greenhouse gas emissions. Road transport accounts for three quarters of energy demand for oil and petroleum products, which is the main source of greenhouse gas emission from fossil fuels in Sweden.
Even though Sweden has the EU’s highest share of renewables in total energy consumption, it still has an untapped potential for renewables. This potential could be harnessed to accommodate the ongoing electrification of industries in the south of Sweden, and the innovative, green industrial developments and decarbonisation in the north of Sweden, which require even greater electricity production. There are still several obstacles to expanding the country’s renewable energy production capacity. This could result in Sweden not achieving its envisioned expansion of wind capacity by 13 GW and of solar power capacity by around 5 GW between 2021 and 2030. One such obstacle is permitting barriers for both offshore and onshore wind power. These barriers emanate from inefficient permitting procedures and veto rights of communes and defence authorities, among other things.
In light of the Commission’s in-depth review and its conclusion on the existence of imbalances, recommendations under Article 6 of Regulation (EU) No 1176/2011 are reflected in recommendation (1) below. Policies referred to in recommendation (1) help to address vulnerabilities linked to high household debt and highly valued real estate.
1. Submit the medium-term fiscal-structural plan in a timely manner. Reduce risks related to high household debt and housing market imbalances by reducing the tax deductibility of mortgage interest payments and increasing recurrent property taxes, while developing appropriate tools for better policy assessment and targeting. Stimulate investment in residential construction to ease the most urgent shortages, in particular by removing structural obstacles to construction. Improve the efficiency of the housing market, including by introducing reforms in the rental market.
2. In light of prolonged delays, significantly accelerate the implementation of the recovery and resilience plan, including the REPowerEU chapter, ensuring completion of reforms and investments by August 2026. Accelerate the implementation of cohesion policy programmes. In the context of their mid-term review continue focusing on the agreed priorities, while considering the opportunities provided by the Strategic Technologies for Europe Platform initiative to improve competitiveness.
3. Improve educational performance, including of students with disadvantaged socio-economic and migrant backgrounds, by addressing the persistent shortage of qualified teachers, by ensuring equal access opportunities to the schooling system and by further supporting the transition of students to upper secondary school. Develop the skills of the labour force, particularly those from disadvantaged socio-economic and migrant backgrounds, through targeted policy measures and resources, to improve their integration into the labour market.
4. Ensure the achievement of greenhouse gas emissions reduction targets by reducing in particular emissions from road transport, and accelerate and streamline permitting procedures for deploying renewables, in particular for offshore and onshore wind energy.
Done at Brussels,
For the Council
The President
1OJ L 2024/1263, 30.4.2024 ELI: data.europa.eu/eli/reg/2024/1263/oj.
2OJ L 306, 23.11.2011, p. 25. ELI: data.europa.eu/eli/reg/2011/1176/oj
3 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility (OJ L 57, 18.2.2021, p. 17) ELI: data.europa.eu/eli/reg/2021/241/oj
4Regulation (EU) 2023/435 of the European Parliament and of the Council of 27 February 2023 amending Regulation (EU) 2021/241 as regards REPowerEU chapters in recovery and resilience plans and amending Regulations (EU) No 1303/2013, (EU) 2021/1060 and (EU) 2021/1755, and Directive 2003/87/EC (OJ L 63, 28.2.2023, p.
1) ELI: data.europa.eu/eli/reg/2023/435/oj
5COM(2023) 168 final.
6COM(2024) 77 final.
7COM(2023) 901 final.
8Council Regulation (EU) 2024/1264 of 29 April 2024 amending Regulation (EC) No 1467/97 on speeding up and clarifying the implementation of the excessive deficit procedure (OJ L, 2024/1264, 30.4.2024, ELI: data.europa.eu/eli/reg/2024/1264/oj) and Council Directive (EU) 2024/1265 of 29 April 2024 amending Directive 2011/85/EU on requirements for budgetary frameworks of the Member States (OJ L, 2024/1265, 30.4.2024, ELI: data.europa.eu/eli/dir/2024/1265/oj).
9Net expenditure as defined in Article 2 of Council Regulation (EU) 2024/1263 of 29 April 2024(OJ L 2024/1263, 30.4.2024. ELI: data.europa.eu/eli/reg/2024/1263/oj). Net expenditure means government expenditure net of (i) interest expenditure, (ii) discretionary revenue measures, (iii) expenditure on programmes of the Union fully matched by Union funds revenue, (iv) national expenditure on co-financing of programmes funded by the Union, (v) cyclical elements of unemployment benefit expenditure, and (vi) one-offs and other temporary measures.
10Council Implementing Decision of 4 May 2022 on the approval of the assessment of the recovery and resilience plan for Sweden (ST 7772/2022; ST7772/2022 ADD1).
11Council Implementing Decision of 9 November 2023 amending the Implementing Decision of 4 May 2022 on the approval of the assessment of the recovery and resilience plan for Sweden (ST 14474 2023).
12SWD(2024) 627 final.
13SWD(2024) 85 final.
14Eurostat-Euro Indicators, 22.4.2024.
15Council Recommendation of 12 July 2022 on the National Reform Programme of Sweden and delivering a Council opinion on the 2022 Convergence Programme of Sweden OJ C 334, 1.9.2022, p. 1.
16Based on the Commission 2024 spring forecast, the medium-term potential output growth of Sweden in 2023 is estimated at 7.7% in nominal terms, based on the 10-year average real potential growth rate and the 2023 GDP deflator.
17The fiscal stance is defined as a measure of the annual change in the underlying budgetary position of the general government. It aims to assess the economic impulse stemming from fiscal policies, both those that are nationally financed and those that are financed by the EU budget. The fiscal stance is measured as the difference between (i) the medium-term potential growth and (ii) the change in primary expenditure net of discretionary revenue measures (and excluding temporary emergency measures related to the COVID-19 crisis) and including expenditure financed by non-repayable support (grants) from the Recovery and Resilience Facility and other Union funds. A negative (positive) sign of the indicator indicates an expansionary (contractionary) fiscal policy.
18Council Recommendation on the 2023 National Reform Programme of Sweden and delivering a Council opinion on the 2023 Convergence Programme of Sweden, OJ C 312, 1.9.2023, p. 252.
19The figure represents the level of the annual budgetary cost of those measures, including revenue and expenditure and, where applicable, net of the revenue from taxes on windfall profits of energy suppliers.
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