The International Monetary Fund has a message for Europe: stop bickering and start borrowing together. On May 23, the IMF told EU finance ministers gathered in Nicosia that the bloc needs structural reforms, fiscal consolidation, and expanded joint debt to handle a wave of spending demands on defense, energy security, pensions, and innovation over the next 15 years.
The IMF explicitly described innovation, energy, and defense as “European public goods” that should ideally be financed at the EU level through common debt instruments.
The numbers behind the ask
Back in October 2025, the Fund recommended more than doubling EU spending on public goods, from 0.4% to 0.9% of Gross National Income. That translates to roughly €100 billion annually, funded through joint debt initiatives.
The Fund’s analysis projects that deeper fiscal integration could yield interest savings of around 0.47% of GDP for member states during the 2030 to 2040 period. The logic is simple: a joint EU bond backed by the collective weight of 27 economies borrows cheaper than, say, Italy borrowing on its own.
