Figure 1a shows how labour force participation has increased steadily from around 71 per cent just after the financial crisis to more than 73 per cent today. This positive development can probably be explained in several ways. The high population growth, which is to some extent due to a high level of migration, could be one factor. A large proportion of the immigrants who have come to Sweden in recent years have been in the age range 25 to 54 years of age, which is a group with a high labour force participation rate. Another factor could be various economic policy reforms that have increased incentives to participate in the labour force. 4 [24]  Another less positive development is the deterioration in matching efficiency. This could be a sign that companies’ requirements and the job seekers’ abilities do not match – for instance because of structural change or deficiencies in the educational system – or because the search and recruitment processes have declined in quality. It therefore becomes more time-consuming and costly for companies to recruit staff. Matching efficiency fell heavily in connection with the financial crisis, see Figure 1b. 8 This need not necessarily be a problem. During economic downturns, some types of competence become outdated at the same time as other and new competences are in demand. For the individual, this can mean that some form of further education becomes necessary. The problem is that matching efficiency appears to have become entrenched at around the same levels as in 2010.
All in all, this recent recommandation from the Governing Council is testimony to its ability to smoothly adapt its internal governance to the challenges posed by enlargement. Strategy of the single monetary policy The Maastricht Treaty clearly defines the ultimate objective of the single monetary policy, that is to say maintaining price stability. However, for attaining this goal, it is essential to clearly define price stability: we define it as a year-on-year increase in the overall Harmonised Index of Consumer Prices (HICP) of below 2% in the whole euro area. Bearing in mind this objective, our monetary policy strategy is based on two “pillars”. We have first assigned a key role to the monetary aggregate M3. This “pillar” is based on a reference value which is set at 4.5% for the annual growth rate of the broad monetary aggregate M3. The concept of a reference value does not mean that the Eurosystem is committed to automatically correcting deviations in monetary growth in the short term. Naturally, we also follow the components and counterparts of M3 closely. In this regard, the development of loans to the private sector, as well as the evolution of government finance and capital flows with the rest of the world, deserve a particular attention. However, it is common sense to say that monetary developments do not account for all the risks to price stability.