The International Monetary Fund (IMF) Managing Director addressed a press conference following the Eurogroup meeting on June 19, 2025. The discussion centered around the economic assessment for the euro area, highlighting key messages from their concluding statement.
The global backdrop was briefly discussed, noting that trade tensions have eased since April's forecast. However, trade policy uncertainty remains high, affecting economic activity globally and within the euro area. "Trade policy uncertainty, together with geopolitical tensions, are slowing economic activity globally and in the euro area," it was stated.
The IMF emphasized that Europe needs coherent and effective policies to enhance growth and resilience without risking fiscal sustainability. Inflation has reached its target but maintaining price and financial stability is crucial amid high uncertainty. "If Europe doesn’t forge ahead with decisive EU-level actions, it runs the risk of declining relative to other advanced and major emerging market economies."
Deepening integration of the EU single market is seen as vital for strengthening potential growth. The current production structure dominated by small firms hampers productivity growth due to their limited scale-up capabilities. Easing barriers in the single market could boost dynamism and innovation.
The digital euro is highlighted as a tool to improve cross-border payment efficiency and reduce transaction costs. Effective deployment of EU public resources in shared priority areas such as defense, research, and energy security is also deemed essential for boosting productivity.
A significant increase in EU budget expenditures on public goods is recommended to close investment gaps. Coordination at the EU level can address shared challenges cost-effectively by avoiding duplicative national efforts.
External policies were also discussed with an emphasis on advocating for a stable global trading system and diversifying partnerships through new free trade agreements to strengthen supply chain resilience.
Safeguarding price stability remains a priority with the current ECB policy rate considered appropriate. However, adjustments may be needed if incoming information affects inflation outlooks materially.
In conclusion, while acknowledging effective past policy actions at both EU and national levels that helped withstand large shocks, continued steadfastness is necessary to tackle future challenges or risk falling behind other large economies.