Recovery and resilience plan for Sweden

Following the unprecedented crisis caused by the COVID-19 pandemic, Sweden’s recovery and resilience plan responds to the need of fostering a strong recovery and making Sweden future-ready. The reforms and investments in the plan will help Sweden become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 15 reforms and 12 investments. They will be supported by €3.3 billion in grants. 44% of the plan will support climate objectives and 21% of the plan will support the digital transition.

The transformative impact of Sweden’s plan is the result of a strong combination of reforms and investments, which address the specific challenges of Sweden. The implementation of the measures is expected to bring about structural change in the economy and society by enhancing its environmental sustainability and digitalisation and fostering skills. A key measure in the plan the Climate Leap investment scheme, which shall finance local and regional activities to reduce emissions of carbon dioxide and other gases affecting the climate, which should accelerate the green transformation of the economy. This is further accentuated through the promotion of innovative technologies for fossil-free solutions in energy-intensive industries. The measures to support for broadband network roll-out will help improve access to high-speed connections in sparsely populated areas. By improving the skills of staff in elderly care centres, the plan will contribute to the welfare of older people and thus help improve social cohesion. All reforms and investments have to be implemented within a tight time frame, as according to the Regulation on the Recovery and Resilience Facility they have to be completed by August 2026.

The plan will foster economic growth and create jobs. It is estimated to raise Sweden’s gross domestic product by 0.2% to 0.3% by 2026 and create at least 4,000 additional jobs. This does not include the positive impact of structural reforms, which can be substantial. Sweden will benefit significantly from the recovery and resilience plans of other Member States, notably through exports. Cross border (GDP) spill overs account for 0.1 percentage points in 2026, showing the value added of synchronised expenditure across Member States.

+ 0.2-0.3% Impact of NextGenerationEU on Sweden's gross domestic product by 2026
+ 4,000 Jobs by 2026
0.1% Gross domestic product benefits thanks to other Member States’ recovery and resilience plans in 2026

When designing the plan, Sweden’s authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 28 May 2021. On 29 March 2022, the Commission gave its green light to the plan. President von der Leyen symbolically handed over the Commission’s assessment to Prime Minister Andersson during a visit in Sweden on 7 April 2022. The plan was in turn approved by the Council on 4 May, opening the door to its implementation and financing.

Green transition

Sweden has set an ambitious target of achieving carbon neutrality by 2045.
Substantial reforms and investments are required to put the country on track towards the achievement of this goal. This concerns in particular the sectors that currently have the highest emissions including energy, housing, transport and industry.

Key measures for the green transition

Sweden’s recovery and resilience plan supports the green transition through investments of €811 million in local and regional climate investment, including projects to reduce greenhouse gas emissions through the conversion to bioenergy for heating in industry. Furthermore, €286 million will be allocated to climate investment in the industrial sector, projects that develop and implement new technology with zero, low or negative emissions of greenhouse gases in industries with high process emissions. €247 million will be invested in protecting valuable nature in areas that host high natural values by establishing formally protected areas of nature reserves. On green transportation, €148 million will be invested in strengthening support to improve railway capacity. In addition, the plan includes a reform incentivising decarbonisation of transport, by abolishing reduction of energy tax on fuel and adjusted taxable benefit rates for company cars.

Example project: Climate investment to reduce greenhouse gas emissions
€811 is made available for achieving emission reduction targets through climate investment, including projects to reduce greenhouse gas emissions through the conversion to bioenergy for heating in industry. The measure is an investment scheme, ‘the Climate Leap’, which shall finance local and regional activities to reduce emissions of carbon dioxide and other gases affecting the climate. The beneficiaries are both private and public entities, notably including municipalities, organisations and enterprises, excluding individuals. The expected effects are also the diffusion of new technologies, market uptake, better health and employment, as well as a positive impact on other environmental objectives.

Digital transition

Digital challenges for Sweden focus on the need to realise the transformative potential of digitalisation, including broadband network roll-out and increased numbers of study places in higher vocational education to address the current scarcity of experts in the Information and Communication Technology sector. In addition, the Swedish plan contains investments to scale-up the education at universities and other higher education institutions,

Key measures for the digital transition

Sweden’s recovery and resilience plan supports the digital transition with a set of investments and reforms. Digital connectivity is supported with €464 million in accelerating broadband network roll-out in sparsely populated areas. Digitalisation of public administrations is supported with €21 million in upgrading digital services in public administration, including a joint digital infrastructure. The plan envisages a €42 million support for digital skills by increasing digital skills at universities and other higher education institutions.

Example project: Digital connectivity: accelerating broadband network roll-out in sparsely populated areas

The €464 million support to the roll-out of high-speed broadband networks, in particular in rural and sparsely populated areas, will contribute to fostering economic activities and territorial cohesion, as well as enabling all citizens to participate in the opportunities of the digital transition, independent of their location. The measure shall fund support for the expansion of broadband connectivity where market operators cannot expand on a commercial basis. The support shall be technology neutral, provided that projects comply with the requested speeds.

Economic and social resilience

Key macro-economic challenges for Sweden’s economy include addressing challenges emanating from high household debt and a malfunctioning housing market, and structural long-term unemployment. Efforts are needed to upgrade skills in segments of the labour market to match market demands as well as to reduce educational gaps and enhance labour market integration.

Key measures in reinforcing economic and social resilience

The plan reinforces economic and social resilience by allocating €196 million to improving employability by expanding vocational training at upper secondary level. Furthermore, the plan invests €308 million in scaling up the education at universities and other higher education institutions to tackle the challenges in the labour market. In addition, the plan allocates €452 million to improving elderly care by upskilling and training of staff working in elderly care centres and €296 million to increasing the supply of new rental dwellings with a lower rent to relief the housing shortage. A reform gradually increases the average retirement age to improve further the sustainability of the public pension system and the plan includes measures to improve the fight against money laundering and terrorist financing, including through strengthening the Financial Supervisory Authority.

Example project: Employment and labour market – Improving employability by expanding upper secondary vocational training

€196 million is made available for boosting employment through improving employability by expanding vocational training at upper secondary level. The aim of this investment is to improve education and training prospects to meet the needs of the labour market and to upskill the labour force, by increasing the number of places in higher vocational education. The investment is expected to address the transition needs in the labour market, where even before the pandemic there has been a labour shortage within many professions, particularly in the welfare, data/IT and industrial sectors.
The Swedish plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, the annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)