Source: International Monetary Fund – IMF (video statements)
Europe is facing daunting fiscal pressures both from new policy priorities (defense, energy security), the escalating costs of population aging (pension, healthcare), and a rising interest bill on already high debt. Without prompt policy action, public debt levels could more than double for the average European country in the next 15 years. This could drive up interest rates, slow down already sluggish economic growth, and undermine market confidence. Both structural reforms and fiscal consolidation will be necessary to deliver the difficult policy adjustment, with one third achieved through a set of moderate reforms and two thirds coming from consolidation. For high-debt countries, however, this policy package would likely be insufficient to meet the fiscal challenge, leaving no option other than a deeper rethink of the scope of public services and the social contract to fill the gap. Delaying policy action could be costly, as the fiscal position would deteriorate further, and make the task for policymakers even more challenging.
On November 4, 2025, the IMF and the European Central Bank jointly organized the launch of the IMF fiscal note of the 2025 Regional Economic Outlook for Europe at the House of the Euro in Brussels. The event features:
• Oscar Arce, Director-General for Macroeconomics and Monetary Economics, European Central Bank
• Alfred Kammer, Director, European Department, International Monetary Fund
• Benedicta Marzinotto, Board Member of the European Fiscal Board and lecturer in Economic Policy at the University of Udine
• Maarten Verwey, Director-General for Economic and Financial Affairs, European Commission
• Moderator: Sarah Collins, Brussels Correspondent, Business Post