By Othman Bouabdallah, Ettore Dorrucci, Carolin Nerlich, Christiane Nickel and Aurelian Vlad Following the June NATO summit, Europe is confronting heightened challenges in financing its green, digital and defence transitions as new defence commitments place increased pressure on national and EU budgets. Balancing strategic priorities with debt sustainability is crucial. This blog outlines a three-pronged strategy: (i) relying on existing fiscal mechanisms; (ii) additional fiscal measures at the national level; and (iii) fostering a more cohesive and productive Europe. Europe is facing...

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The European Commission is taking action against several EU Member States that have failed to notify the Commission of measures they have adopted to transpose EU Directives into their national laws. The deadline to transpose these Directives has expired recently. The Commission is sending a letter of formal notice to these Member States, giving them two months to reply and complete the transposition of the Directives. If they fail to do so, the Commission may issue a stronger warning,...

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The Commission analysis in this report is based on statistics for 2024 received from Member States in relation to the application of the e-commerce package 1. Introduction Against a backdrop of explosive growth in e-commerce activity and a fragmented regulatory framework for the collection of VAT on e-commerce supplies, the VAT e-commerce package, which came into effect on 1 July 2021, introduced a number of VAT and customs related reforms. These reforms were designed to help navigate the challenges presented by...

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By Pierre-Olivier Gourinchas, Economic Counsellor and Director of Research, IMF Growing imbalances in largest economies underscore need for concerted adjustment in domestic macroeconomic policiesGlobal current account balances widened by a sizable 0.6 percentage points of world GDP in 2024. When adjusted to account for the volatility around the pandemic and Russia’s war in Ukraine, the widening is a notable reversal of the narrowing since the global financial crisis and may signal a significant structural shift. Our just released 2025 External Sector...

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• Firms continued to report declining interest rates on bank loans, while indicating a slight tightening of other lending conditions. • The bank loan financing gap remained stable, with firms reporting that both needs for bank loans and the availability of bank loans were broadly unchanged. • Firms’ one-year-ahead median inflation expectations decreased to 2.5%, down from 2.9%, while median inflation expectations three and five years ahead remained unchanged at 3.0%. • Most firms reported that they had been affected to some...

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"Check against delivery" Commissioner Síkela Good morning, ladies and gentlemen, We have entered an era of growing geopolitical challenges. From climate-driven instability and global migration pressures to rising competition over critical raw materials, global influence, and market access. But to Europe – as a reliable, trustworthy partner - the current situation also brings new opportunities. Opportunities to build strategic partnerships. To open new markets for European companies.  This is why Europe needs a stronger and more agile external action. If we want...

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The Council today formally adopted new value added tax (VAT) rules for distance sales of imported goods. The directive will improve collection of VAT on imported goods by ensuring suppliers are always liable for VAT paid on imports, rather than the EU consumer as is currently usual practice. This should encourage suppliers outside the EU to use the VAT import one-stop-shop (IOSS) for VAT reporting and collection. Import one-stop-shop (IOSS) The already-existing IOSS serves as a point of contact for importers of goods from third countries...

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We take note of the letter sent by U.S. President Trump outlining a revised tariff rate and a new timeline. Imposing 30 percent tariffs on EU exports would disrupt essential transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic. Few economies in the world match the European Union's level of openness and adherence to fair trading practices. The EU has consistently prioritized a negotiated solution with the U.S., reflecting our commitment to dialogue,...

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