Twelve of the EU\u2019s 27 countries now have debt-to-GDP ratios<\/a> above the bloc\u2019s 60% threshold. Several major economies, including Italy, France, and Spain, have debt ratios above 100%. Italy and France are also among the nine EU countries subject to an \u2018excessive deficit procedure<\/a>\u2019 \u2013 or formal reprimand \u2013 by the European Commission for breaching the EU\u2019s 3% deficit threshold.<\/p>\n INTERVIEW: \u2018Take it off the table\u2019: Union chief urges Brussels to protect workers\u2019 rights<\/p>\n \n\t\t\t\t\tThe European Commission has repeatedly rebuffed unions\u2019 demands to drop the \u201cthreat\u201d of rolling back\u2026\t\t\t\t<\/p>\n \n\t\t\t\t\t4 minutes\t\t\t\t<\/p>\n \t\t\t\t\t The IMF, however, suggested that relatively low borrowing costs, greater tax revenue, and deeper and more liquid financial markets mean most EU governments can now safely maintain a debt ratio of 90% without jeopardising their fiscal sustainability.<\/p>\n It also noted that the need to slash deficits and debt levels could be significantly offset through \u201cgrowth-enhancing\u201d reforms. These include deepening the bloc\u2019s single market for\u00a0capital<\/a> and energy, streamlining business regulations, and issuing common EU debt to finance critical \u201cpublic goods,\u201d such as energy and military infrastructure.<\/p>\n Even then, a \u201cmoderate\u201d reform package would likely fall short of restoring debt sustainability in many member states, the IMF said.<\/p>\n Around a quarter of European countries would need to cut net spending by over one percentage point of GDP each year for five years \u2013 significantly more than the fiscal consolidation typically experienced by European countries in recent decades.<\/p>\n \u201cIn these countries, a discussion on the scope and sustainability of the \u2018European model\u2019 seems unavoidable,\u201d the Fund noted.<\/p>\n Governments could seek to \u201cdifferentiate between basic and premium services\u201d in key areas including pensions, education, and health, with only the basic services remaining publicly funded and freely available, the Fund noted.<\/p>\n However, it acknowledged that such measures are likely to meet stiff public resistance, with anti-government sentiment already being fuelled in many EU countries by deteriorating government services<\/a>, rampant deindustrialisation<\/a>, and declining or stagnant wages<\/a>.<\/p>\n Alfred Kammer, director of the IMF\u2019s European Department, said \u201csome parts\u201d of Europe\u2019s population would experience the proposed reforms \u201cas painful, but then you need to deal with that pain\u201d.<\/p>\n \u201cWhen you are doing reform, you don\u2019t want to create pain, nothing but pain, over the years to come,\u201d Kammer told reporters, adding that governments should \u201cbe honest\u201d and seek to \u201cfind compromises\u201d with European citizens.<\/p>\n \u201cIncremental steps are most likely to be feasible and gain public support,\u201d the Fund said. \u201cGovernments should clearly explain the rationale behind the reforms, identify the spending pressures they address, and reset public expectations.\u201d<\/p>\n (mm, cm)<\/p>\n","protected":false},"excerpt":{"rendered":"Europe\u2019s soaring levels of public debt should force governments to fundamentally \u201crethink\u201d their role in providing essential services…\n","protected":false},"author":2,"featured_media":118953,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[138,219,111,139,69],"class_list":["post-118952","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-new-zealand","tag-newzealand","tag-nz"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/118952","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=118952"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/118952\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/118953"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=118952"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=118952"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=118952"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"INTERVIEW:](\"https:\/\/www.newsbeep.com\/nz\/wp-content\/uploads\/2025\/11\/GettyImages-2205292431-800x561.jpg\")
\t\t\t<\/p>\n