IMF urges Europe to speed up reforms as recession risks persist

“Europe has weathered the energy shock better than one might have feared, at least for the time being. This has been made possible by the energy transition, which is reducing dependence on fossil fuel imports,” Mateusz Szczurek, who has headed the IMF’s European Department since July, told reporters.

Nevertheless, “Europe is not out of the woods yet”, and its economic growth remains “fragile and subdued”, he noted.

In its economic forecasts updated this autumn, the IMF projects eurozone growth of 1.2% in 2026, excluding Ireland, followed by a slowdown to 1.1% in 2027.

This is an extremely modest level of growth, meaning that “even moderate shocks could raise the risk of recession”, Mr Szczurek warned.

In addition to prudent monetary and fiscal policies amid elevated inflation, the IMF recommends that European countries continue their energy transition and implement structural reforms to strengthen economic growth.

These reforms should focus primarily on strengthening the European Single Market, as well as improving the functioning of national markets.

“Now is the time for action,” stressed Mr Szczurek, who previously served as Poland’s Minister of Finance from 2013 to 2015.

IMF Calls for Swift Adoption of France’s 2027 Budget

Turning to France, amid ongoing political uncertainty and as presidential elections approach, the IMF official called for the adoption of the country’s 2027 budget “as soon as possible”.

He believes that “the elections will provide an opportunity to establish a direction that combines the consolidation of public finances, which is essential to placing them on a sustainable path, with reforms aimed at strengthening long-term economic growth”.