NICOSIA – European Union countries will face large bills for defence, energy and pensions in the next 15 years, the International Monetary Fund told EU finance ministers on May 23, 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…