European Commissioner for Economy and Productivity Valdis Dombrovskis and Cyprus' Minister of Finance Makis Keravnos attend a press conference during an informal meeting of the Economic and Financial Affairs Council (ECOFIN), in Nicosia on May 23, 2026. (Reuters/Yiannis Kourtoglou)
European Union countries will face large bills for defense, energy and pensions in the next 15 years, the International Monetary Fund told EU finance ministers on Saturday, suggesting a mix of reforms, consolidation and joint borrowing as a way to manage that."If left unchecked, public debt will be on an unsustainable path. Under unchanged policy, debt of the average European country would reach 130 percent of GDP by 2040 — roughly doubling from today," the IMF said in a paper used as a basis for the ministers' discussions at an informal meeting in Nicosia.
The paper said that to prevent such a scenario, EU countries must improve incentives for citizens to move around the 27-nation bloc to find work and for companies to hire them.
The EU should also integrate its energy markets, make it easier for citizens' savings to flow across the bloc into profitable investments and unify laws that now often differ from country to country.
