Europa unter Druck: Wie kann die Politik mit ausufernden Ausgaben umgehen? (Diskussion)

Watch ad-free in our ifo Media Library: https://www.ifo.de/mediathek/2026-07-... Munich Economic Debate July 13, 2026, 6:00 PM - 7:30 PM CET/CEST Helge Berger, International Monetary Fund Clemens Fuest, ifo Institute Alexander Mühlauer, Süddeutsche Zeitung Helge Berger, Deputy Director in the European Division of the International Monetary Fund (IMF) and Honorary Professor at the Free University of Berlin, and Andrew Hodge, Deputy Head of Division in the European Division of the IMF, discuss the increasing fiscal burdens in Europe. Aging societies, rising defense spending, and the costs of the energy transition are driving up national debt in many European countries. Aging societies are driving up spending on pensions and healthcare in Europe. At the same time, defense and energy transition costs are rising as governments prepare for wars and geopolitical tensions. As a result, European countries are significantly increasing their borrowing. Public debt is threatening to become unsustainable in many member states—a burden for future generations. How can we prevent this, and what would it mean for citizens and businesses? Decisive action today can reduce the need for harsher tax cuts and spending reductions in the future. In their presentation, Helge Berger and Andrew Hodge, both from the International Monetary Fund (IMF), examine how European policymakers can act. Reforms to boost growth are essential, as stronger growth increases government revenue and helps stabilize debt. Further deepening the EU single market is particularly important: administrative barriers must be removed to allow goods, services, people, and capital to circulate more freely within Europe. Furthermore, governments must reprioritize their spending, improve efficiency, or increase tax revenue to keep debt under control. In highly indebted countries, more far-reaching measures may be necessary, such as making services more targeted, reforming subsidies, or introducing pricing for the use of certain public services for wealthier households, as well as restructuring or privatizing state-owned enterprises. At the same time, it is crucial to ensure the provision of essential services and to protect vulnerable populations. Based on a cross-country analysis in a new departmental report from the IMF, this presentation will demonstrate what an appropriate policy response could look like. The discussion will offer timely insights for policymakers, businesses, and society as a whole. ifo Institute – Leibniz Institute for Economic Research at the University of Munich