Sweden has been criticized for high housing prices and high household debt every year since the Commission introduced its annual economic recommendations to member states in 2012.
However, in this year's report, the situation is no longer considered to be as vulnerable.
"Although the Swedish economy is highly sensitive to interest rates due to the widespread use of variable mortgage rates, it has proven resilient to higher interest rates in 2022 and 2023, which has caused house prices to fall. Household debt as a share of GDP, which has fallen since the pandemic, has leveled off in 2025 and is expected to be stable," the EU Commission writes, among other things.
Climate and school
This means that, for the first time, Sweden is no longer considered to have a so-called "macroeconomic imbalance."
However, this does not mean everything is calm. The Commission still recommends that Sweden reform the rental market and stimulate housing construction.
The Commission also notes that greenhouse gas emissions are increasing and that Sweden is not on track to meet its EU target by 2030. Faster and simpler permits are called for to expand renewable energy, especially for wind power, both on land and at sea.
The Commission also criticizes Swedish schools for being unequal and disadvantaging students with immigrant backgrounds.
Bulgaria is scrutinized
Among other EU countries, Bulgaria - which was admitted to the eurozone as recently as January 1 this year - risks being punished for its excessively high budget deficit, which is expected to be above four percent both this year and next. The Commission is now proposing to open a formal procedure against the country.
More generally, the European Commission points to the need for retraining and a better-educated workforce in its Spring Economic Package.
“A Union that invests in skills, quality jobs and living standards is a Union that can outcompete... all challenges,” said Employment Commissioner Roxana Minzatu in a press release.
