This paper examines the challenges to the Swedish welfare state after the credit crunch of 2008 focusing on several major challenges: the government’s reaction to the fiscal and economic crisis and its outcomes, the (re)balance of welfare policies addressing risks and opportunities. While the situation is almost excellent from a purely fiscal point of view, the outstanding private debt, unemployment, especially among youth, pressures on the pension, health and education systems are prominent concerns. They have led to the revitalization of the social investment paradigm, strict budgetary policies, increased number of welfare-to-work programmes and focus on using tax reductions as a means of stimulating the labour market. In this context, the main demographic concerns and social integration have come to the fore to an unprecedented extent.