Latest news with #AlfredKammer
Yahoo
20-05-2025
- Business
- Yahoo
EU budget needs 'a comprehensive overhaul' to handle shocks, says IMF
The EU needs to spend more on public goods to strengthen productivity and growth, said the International Monetary Fund on Tuesday. Speaking at the annual EU budget conference, Alfred Kammer, the IMF's European department director, noted that 'the scale and nature of the challenges ahead require a fundamental rethink'. Kammer suggested that the EU should raise its spending on public goods from 0.4% of GNI (gross national income) to at least 0.9%. Without cuts to existing programs, that would increase the bloc's MFF spending to 1.7% of GNI in the period from 2028 to 2034. That's up from 1.1%, Kammer added. The MFF is the EU's long-term budget which usually covers a seven year period, with the current plan running up to 2027. The IMF noted that Europe is facing a raft of challenges, notably ageing populations, the climate crisis, and a productivity slump. Rising geopolitical tensions and unpredictable US policies are further clouding the region's outlook, as the EU must become more self-sufficient in terms of security. One way to tackle these issues is by boosting growth and improving the single market, said Kammer. While goods, services, capital and people can in theory move freely between member states, the IMF warned that barriers still exist. Related IMF chief: Eurozone has tools for greater growth if it learns from US Capital Markets Union: What is it and what could it bring to Europe? 'The EU single market remains far from complete,' Kammer said at the Centre for European Policy Studies (CEPS) in a separate briefing on Monday. 'For instance, it can take up to 6 months for an EU worker who relocates to another EU country to be legally employed there. Large differences across bankruptcy procedures discourage cross-border investment, while having national stock markets introduces vast inefficiencies in the allocation of capital across the continent. This fragmentation increases costs and hurts business dynamism and growth.' The IMF said it expects growth at 0.8% and 1.2% in 2025 and 2026, a reduction of 0.2 percentage points in both years compared to the projection shared in January. It noted that inflation is decelerating and approaching targets, driven by lower energy prices and tepid demand. Regarding the ECB trajectory, it said the central bank should lower its policy rate to 2% this summer and leave it stable for the foreseeable future. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Euronews
20-05-2025
- Business
- Euronews
EU budget needs 'a comprehensive overhaul' to handle shocks, says IMF
The EU needs to spend more on public goods to strengthen productivity and growth, said the International Monetary Fund on Tuesday. Speaking at the annual EU budget conference, Alfred Kammer, the IMF's European department director, noted that 'the scale and nature of the challenges ahead require a fundamental rethink'. Kammer suggested that the EU should raise its spending on public goods from 0.4% of GNI (gross national income) to at least 0.9%. Without cuts to existing programs, that would increase the bloc's MFF spending to 1.7% of GNI in the period from 2028 to 2034. That's up from 1.1%, Kammer added. The MFF is the EU's long-term budget which usually covers a seven year period, with the current plan running up to 2027. The IMF noted that Europe is facing a raft of challenges, notably ageing populations, the climate crisis, and a productivity slump. Rising geopolitical tensions and unpredictable US policies are further clouding the region's outlook, as the EU must become more self-sufficient in terms of security. One way to tackle these issues is by boosting growth and improving the single market, said Kammer. While goods, services, capital and people can in theory move freely between member states, the IMF warned that barriers still exist. 'The EU single market remains far from complete,' Kammer said at the Centre for European Policy Studies (CEPS) in a separate briefing on Monday. 'For instance, it can take up to 6 months for an EU worker who relocates to another EU country to be legally employed there. Large differences across bankruptcy procedures discourage cross-border investment, while having national stock markets introduces vast inefficiencies in the allocation of capital across the continent. This fragmentation increases costs and hurts business dynamism and growth.' The IMF said it expects growth at 0.8% and 1.2% in 2025 and 2026, a reduction of 0.2 percentage points in both years compared to the projection shared in January. It noted that inflation is decelerating and approaching targets, driven by lower energy prices and tepid demand. Regarding the ECB trajectory, it said the central bank should lower its policy rate to 2% this summer and leave it stable for the foreseeable future. Consumer confidence in the European Union and the euro area staged a modest rebound in May, according to the European Commission's Directorate-General for Economic and Financial Affairs (DG ECFIN). The flash estimate released on Tuesday showed the consumer sentiment indicator rising by 1.4 percentage points in both regions, following sharp declines in April. Nevertheless, sentiment remains substantially below its historical average, standing at -14.5 points in the EU and -15.2 in the eurozone. Markets now turn their attention to Thursday's release of flash Purchasing Managers' Index (PMI) figures from Hamburg Commercial Bank, alongside Germany's closely watched Ifo Business Climate survey. These indicators will offer a broader view of momentum across Europe's largest economies and the eurozone as a whole. Consensus forecasts point to marginal improvements across the board. Across the euro area, the composite PMI is anticipated at 50.7, up from 50.4 in April. Manufacturing is forecast to move closer to neutral territory from 49 to 49.3, while the services index is expected to edge up by 0.2 points to 50.3, potentially reinforcing the view of a shallow recovery taking shape. In France, the composite PMI is expected to edge up from 47.8 to 48, still signalling contraction. Manufacturing and services are also forecast to inch up to 48.9 and 47.5 respectively, suggesting continued weakness in domestic demand. Germany's outlook appears slightly more resilient. The composite PMI is projected to increase to 50.4 from 50.1, straddling the threshold between contraction and expansion. Manufacturing is seen improving to 48.9, while services are forecast to reach 49.5, hinting at soft but gradually recovering conditions. Further insight into German economic sentiment will come from the Ifo Institute's May business climate report. Consensus points to an uptick in the headline index to 87.4, from 86.9 last month. The current conditions sub-index is projected at 86.8, while expectations are forecast to improve to 88 from 87.4. European equities rise on Tuesday The euro rose to $1.1250, up 0.1% on the session, extending gains made last week. German 10-year Bund yields held their earlier advance, trading at 2.62%, up five basis points on the day. European equity markets posted moderate gains on Monday, buoyed by the rebound in global risk sentiment from the past week. The Ibex 35 led the region with a 1.55% daily gain by 16:20 Central European Time, supported by strength in the banking sector. The Euro Stoxx Banks index advanced 1.1%, outpacing broader benchmarks. Austria's BAWAG gained 2.79%, while AIB Group rose 2.77% and CaixaBank added 2.22%, fuelling the rally in financials. France's Cac 40 added 0.66%, Germany's Dax climbed 0.51%, and Italy's FTSE Mib edged up 0.46%, suggesting broad-based, if cautious, risk appetite across continental bourses. The Euro Stoxx 50, however, slipped 0.05%, weighed down by a mixed performance among its large-cap constituents, while the pan-European Stoxx 600 rose 0.74%.
CNBC
28-04-2025
- Business
- CNBC
Europe has so much more room to produce improved productivity, IMF official says
The IMF European Department Director Alfred Kammer discusses the continent's competitiveness and productivity challenges, and preparing the Single Market for geopolitical uncertainty.
CNBC
28-04-2025
- Business
- CNBC
German fiscal boost won't outweigh tariff drag for euro zone, IMF's Europe head says
Higher German infrastructure spending will boost Europe's economic growth in the coming years — but not enough to outweigh the expected drag from U.S. tariffs, according to Alfred Kammer, director of the European department at the International Monetary Fund. The IMF last week cut its growth outlook for the euro area, also making downgrades for the U.S., U.K. and many Asian countries due to President Donald Trump's volatile tariff policy. The institution cut its euro area growth forecasts for each of the next two years by 0.2 percentage points, to 0.8% in 2025 and 1.2% in 2026. "It's the tariffs and the trade tensions which weigh on the outlook rather than the positive effects on the fiscal side," Kammer told CNBC's Carolin Roth in an interview at the IMF-World Bank Spring Meetings last week. "What we see is we have a meaningful downgrade for Europe advanced economies... and for the emerging euro area countries double as much over this two-year period." The negative impact of tariffs will be slightly offset by Germany's recent infrastructure spending bill, which will boost growth in the euro area over those two years, Kammer said. Exemptions passed to Germany's longstanding debt rules have unlocked higher defense spending and enabled creation of a 500 billion euro ($548 billion) infrastructure and climate fund. The move has been described by economists as a potential "game changer" for the sluggish economy — the largest in the euro zone. However, optimism has been shaken by U.S. tariffs, which are widely expected to dampen global growth and trade flows. Several policymakers at the European Central Bank told CNBC last week that while the inflation path appeared positive — with tariffs potentially bringing inflation in the bloc down further — their broader outlook was now significantly more uncertain. The IMF's Kammer said that the ECB should only cut interest rates once more this year, by a quarter percentage point, despite growth risks. The ECB has so far reduced rates seven times in quarter-percentage-point increments, starting in June 2024. Its most recent move lower in April took the deposit facility, its key rate, to 2.25%. "We have a very clear recommendation for the ECB. What we saw so far is a huge success in the disinflation effort and monetary policy has worked ... so we are expecting to sustainably hit the 2% inflation target in the second half of 2025," Kammer told CNBC. "Our recommendation is there is room for one more 25-basis-point cut, in the summer, and then the ECB should hold that 2% policy rate unless major shocks hit and there is a need for recalibrating monetary policy," he added. Overnight index swap pricing on Monday pointed to market expectations for two more quarter-point cuts this year.
France 24
25-04-2025
- Business
- France 24
EU, US should de-escalate and negotiate trade deal: IMF Europe director
"In our discussions with European leaders, I don't sense any difference of views with regard to the importance of that relationship," IMF Europe Director Alfred Kammer told reporters in Washington. "An effort needs to be made to de-escalate and to negotiate a deal," he said, adding he hoped the negotiations would be successful. Kammer's comments came during a press briefing as part of the World Bank and IMF's Spring Meetings in Washington which has brought the world's finance ministers and central bankers together at the same time as many countries look to rapidly renegotiate their trading relationship with the United States. Earlier this month, US President Donald Trump slapped steep tariffs on many countries -- including a new 20 percent rate on the European Union -- only to then temporarily roll back most tariffs to a "baseline" 10 percent rate a few days later. Alongside these measures, the administration has also introduced sector-specific levies in areas including automobiles, steel and aluminum. The White House has given those countries and blocs facing higher tariffs a 90-day period ending in July to negotiate a deal and bring down trade barriers with the United States. It is the EU, and not member states, who have been tasked with negotiating the deal, but European finance ministers in Washington have still weighed in with their views of the state of negotiations. "We're not going to hide the fact that we're still a long way from an agreement," French economy minister Eric Lombard said in an interview on Thursday. At an IMF event later in the day, German Finance Minister Joerg Kukies struck a more hopeful note that a deal could be done in time. "We're optimistic that it will work, the sooner, the better," he said. Kammer also addressed the question of European growth, which has lagged behind the United States in recent years. "There is a narrative out there that Europe is not competitive, and that narrative is actually wrong," he said. "Europe is competitive. Europe has a current account surplus versus the rest of the world," he said. "What we are arguing is that Europe has a gap in its productivity and, in particular, a gap in labor productivity."
