BRUSSELS: Europe’s sovereign-debt dynamics are in danger of going badly awry if the region doesn’t get a grip on its public finances, the International Monetary Fund (IMF) says.
A piecemeal approach in many nations is running out of road amid increasing challenges, including population ageing, the energy transition and rearmament, economists, including Luc Eyraud, Mahika Gandhi and Andrew Hodge, wrote in a paper published on Monday.
“If long-term spending pressures are left unaddressed, debt dynamics could be placed on an explosive path in many European countries,” the IMF analysts said.
“Tinkering at the margin is likely to be insufficient given the scale of the necessary adjustment while potentially causing reform fatigue.”
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