IMF warns of stagnation risk in Europe without immediate action

Europe is at risk of falling into stagnation, the International Monetary Fund (IMF) warns. To prevent this, the continent must address slowing economic growth, boost investment, and counter geopolitical threats.

The organization projects that the eurozone's GDP growth will reach just 0.8% this year, despite record-low unemployment and inflation nearing its target level. 

To boost economic growth, the IMF is urging EU nations to accelerate integration efforts. The Fund's analysts warn that persistent barriers between member states continue to hamper innovation and suppress business activity across the region.

IMF estimates show that current EU restrictions impose costs on businesses equivalent to 44% tariffs on goods and 110% duties on services. The organization highlights that removing these barriers through regulatory harmonization, capital market reforms, and improved labor mobility could boost GDP by up to 3% over a decade.