The International Monetary Fund warns that EU public debt could reach 130 percent of GDP by 2040 without significant reform. To combat this, the IMF suggests the European Union adopt joint borrowing to fund essential public goods, specifically focusing on energy and innovation. A key part of the proposal includes providing government guarantees for riskier low-carbon and climate-resilient investments. This strategy aims to attract private capital to decarbonization projects that might otherwise be seen as too volatile for traditional investors.
