The Swedish Fiscal Framework: The Challenge of Maintaining Fiscal Discipline amid Rising Spending Pressures

This Economic Brief shows how Sweden’s fiscal framework restored discipline and lowered public debt, and how it is being adapted to meet new spending needs, including on defence.

Highlights

• This Economic Brief explains how the Swedish national fiscal framework has contributed to restoring fiscal discipline and a decreasing public debt ratio.
• The paper analyses how the framework creates a central government budget “surplus bias” and a so called “reform space” each year; this effect is however weaker for the local government subsector.
• The government’s proposal to modify the fiscal framework would mean, inter alia, that the surplus target would be replaced by a target for general government net lending, the level of which would be reduced from 0.33% of GDP on average over the business cycle, to 0% of GDP (i.e. going from a surplus to a balanced budget target). 

Information and identifiers

Economic Brief 87. December 2025. Brussels. PDF. 24pp. Tab. Graph. Bibliogr. Free.

KC-01-25-039-EN-N (online)
ISBN 978-92-68-12543-4 (online)  
ISSN 2443-8022 (online)
doi:10.2765/63089 (online) 

JEL classification: H2, H3, H6, H7.

Disclaimer

European Economy Economic Briefs are written by the staff of the European Commission’s Directorate-General for Economic and Financial Affairs to inform discussion on economic policy and to stimulate debate. The views expressed in this document are solely those of the author(s) and do not necessarily represent the official views of the European Commission.