IMF urges Europe reforms as growth stays fragile

The International Monetary Fund urged Europe on Thursday, November 12, to speed up economic reforms, warning that growth remains fragile and future shocks could lead to recession.

IMF Europe head Mateusz Szczurek said Europe had handled the energy shock better than feared, partly because renewable energy adoption reduced reliance on imported fossil fuels. But he said the region was “not yet out of the woods.”

Szczurek said high energy prices would continue to weigh on the economy and that rising sovereign yields showed fiscal challenges could not be ignored.

The IMF is forecasting growth of 1.2 percent in the eurozone, excluding Ireland, this year, before a slight dip to 1.1 percent next year. Szczurek said that even at that level, shocks could lead to recession because growth was set to remain “fragile and mediocre.”

The IMF recommended prudent monetary and fiscal policies, continued energy transition and reforms to strengthen the European single market and raise weak productivity.

On France, where unrest over the cost of living comes ahead of next April's presidential elections, Szczurek said it was “absolutely clear” that France needed to adopt the 2027 budget as quickly as possible.