## Statement by Mr. Harris — EU Council of Economic and Finance Ministers ## Source details **Canonical URL:** [Statement by Mr. Harris — EU Council of Economic and Finance Ministers](https://www.imf.org/-/media/files/meetings/2026/annual/imfc/ecofin.pdf) ## Other formats - [Markdown version](/-/media/files/meetings/2026/annual/imfc/ecofin.pdf.md) - [Structured JSON version](/-/media/files/meetings/2026/annual/imfc/ecofin.pdf.json) --- ### Global outlook and risks - The EU stands behind an open, fair, predictable, and rules-based multilateral system and is firmly committed to a strong, quota-based and adequately resourced IMF at the centre of the Global Financial Safety Net (GFSN). - The global economy faces major challenges related to policy uncertainty, trade tensions, wars and conflicts, including Russia’s illegal war of aggression against Ukraine, conflict in the Middle East, disruptions to key supply chains, energy security and fiscal vulnerabilities. - The ongoing conflict in the Middle East is described as a significant adverse shock, notably (via) energy markets, raising inflationary pressures, weakening confidence and weighing on activity. - Mitigating factors cited: release of strategic oil reserves, reconfiguration of production and trade patterns, fiscal support to households and the ongoing AI-driven investment cycle, particularly in the United States and Asia. - Warning on financial stability: developments on the funding side (in relation to both AI investments and government borrowing at long maturities) signal potential financial stability risks that should be closely monitored. - Risks to the outlook for growth are said to remain tilted to the downside. ### Trade policy and World Trade Organisation reform - The EU promotes a positive trade agenda balancing market openness and economic security, including supporting diversification of supply chains through trade partnerships and autonomous trade instruments where necessary. - Recent engagement examples: agreements referenced with Mercosur and India, and a new agreement with Australia. - The EU calls for a deep and comprehensive reform of the World Trade Organisation and states that it laid down its approach to WTO reform in three new papers tabled in July in Geneva. ### Global macroeconomic imbalances - Global macroeconomic imbalances have widened and warrant renewed policy attention. - Some imbalances reflect fundamentals (relative income levels, cyclical positions, demographics) and in an open, rules-based context are not per se problematic; persistent and excessive imbalances beyond fundamentals and stemming from distortions are a concern. - Preferred approach: cooperative, timely, and ideally simultaneous policy action, tackling unsustainable policies, distortions or rigidities to support orderly adjustment and avoid negative spillovers. - Large-scale non-market policies combined with macro measures and policies affecting exchange rate adjustment can materially affect savings-investment balances, amplify current account divergence, generate spillovers and hinder adjustment. - Statement: “Tariffs will not resolve global imbalances.” - Assessment: the euro area surplus has narrowed and is assessed as broadly in line with fundamentals. - Support for IMF: EU Member States support the IMF’s role in providing impartial and well-founded analysis, including updating and refining the External Balance Assessment model and further analysis of industrial policies, financial factors, managed exchange rate regimes and alternative rebalancing scenarios. ### Financial regulation and supervisory reform - The EU supports the G20 regulatory and supervisory modernisation exercise, advocating focus on simplification while preserving resilience and stability of the financial system. ### Ukraine — financial, military and reconstruction support - Principle: “There can be no negotiations on Ukraine without Ukraine, nor negotiations that affect European security without Europe’s involvement.” - The EU asserts it has stood by Ukraine and significantly stepped up financial, economic, humanitarian, military and diplomatic support, coordinating with like-minded partners and allies. - The EU and its Member States are described as Ukraine’s largest international donor, providing over EUR 216.7 billion in assistance. - On 24 February 2026, Regulation (EU) 2026/467 established the Ukraine Support Loan (USL) for 2026 and 2027 under enhanced cooperation, providing for a limited-recourse loan of up to EUR 90 billion to address Ukraine’s budgetary and defence needs. - USL structure: approximately two thirds allocated to military assistance, and the remaining one third provided as general budget support. - Disbursements to date under the USL: EUR 11.6 billion, comprising EUR 3.2 billion in macro-financial assistance and EUR 8.4 billion for defence procurement. - G7 Extraordinary Revenue Acceleration initiative: disbursements largely completed, providing Ukraine with approximately EUR 44 billion in loans out of the EUR 45 billion total package; these loans will be repaid using windfall profits from Russia’s immobilised central bank assets. - EU exceptional MFA loan under that initiative: EUR 18.1 billion, fully disbursed in 2025. - IMF engagement with Ukraine: new 48-month, extended arrangement under the Extended Fund Facility (EFF) amounting to USD 8.1 billion, underpinned by financing assurances from international partners. - Review and disbursement: completion of the first review of the arrangement on 20 July 2026 enabled the disbursement of approximately USD 690 million. - The IMF programme is described as key in anchoring expectations for macroeconomic stability, restoring debt sustainability and external viability, and promoting long-term growth in the context of post-war reconstruction and Ukraine’s EU accession path. - Call for Ukraine: accelerate structural reform efforts and implement reforms agreed under the IMF program, the Memorandum of Understanding (MoU) of the new EU Macro-financial assistance and the Ukraine Plan under the EU Ukraine Facility. ### EU macroeconomic and fiscal developments - The EU economy is said to have demonstrated a relatively high degree of resilience amid a challenging geopolitical environment and high uncertainty. - Inflation and growth outlook for the EU have become more uncertain due to the continuing conflict in the Middle East; the risk of broader economic fallout is described as elevated (structural trade and insurance costs, migration pressures and geoeconomic fragmentation). - Expected outcomes: EU economy is expected to continue to generate employment and real wage growth; investment is expected to rebound this year, also supported by the Recovery and Resilience Facility (RRF) in its last implementing year. - Euro area fiscal stance: expected to turn mildly expansionary in 2026, driven by the RRF and by growth in national current expenditure and nationally financed public investment, including for defence. - Monetary policy: the ECB is closely monitoring the intensity and duration of the Middle East shock and is setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term. - NGEU/RRF disbursements: total amount of grants and loans disbursed by mid-September 2026 under the RRF reached EUR 440 billion, with 61.9% of grant support. - Policy priorities to enhance competitiveness and resilience: implementation of the Competitiveness Agenda based on the “Competitiveness Compass”; completing the Single Market; initiatives in clean industry, regulatory simplification, banking competitiveness, the EU Savings and Investments Union, innovation and R&D, targeted measures for strategic sectors and technologies including AI, and the “EU Inc. Initiative”. ### Energy, defence spending and renewables - Significant progress in renewable energy deployment since 2022 has helped contain the impact of the latest energy shock. - By 2025, renewable energy sources accounted for about 48% of the EU’s electricity consumption. - Many Member States have adopted measures to mitigate impacts on citizens and businesses. - The transition to higher levels of defence spending in the medium term is being facilitated by activation of the national escape clause (NEC) of the Stability and Growth Pact in many Member States; there is an opportunity to request extension in the scope of the NEC for defence to include measures that strengthen energy security. ### Climate action and sustainable finance - The EU links climate action, adaptation, sustainable development, deployment of clean technologies and industrial transformation to competitiveness and resilience. - Continued commitments: work with international partners for a just transition to a net-zero economy in line with the Paris Agreement; building on COP30 outcomes and preparations for COP31; support for ambitious Nationally Determined Contributions; accelerate mitigation, adaptation and resilience. - Commitment to implement the New Collective Quantified Goal (NCQG) to mobilise climate finance for developing countries and to mobilise climate finance from all sources and broaden the contributor base. - EU domestic goals: advance transition towards a climate-neutral economy by 2050 through continued implementation of the European Commission’s “Fit for 55” package and advance on the EU 2040 climate target. - The EU will continue to advance its Sustainable Finance Framework and promote mobilisation of private capital for transition and resilient investments. ### IMF policy issues, quotas, and resources - The IMF’s role is emphasised in promoting global monetary and financial cooperation and supporting countries in line with its mandate; EU Member States support implementation of recently completed policy reviews: Comprehensive Surveillance Review, Financial Sector Assessment Program Review, Review of the Bank-Fund Debt Sustainability Framework for Low-Income Countries and Review of Program Design and Conditionality. - Support for efforts to enhance effectiveness and catalytic role of IMF programs through robust and effective conditionality tailored to country-specific circumstances. - Continued Fund focus supported on macro-critical current and emerging challenges: climate change and ecosystem degradation, extreme weather events and natural disasters, pandemics, conflicts and fragility, as well as structural policies and reforms including gender and economic governance. - Quotas and governance: many IMF members have already consented to their quota increase; EU Member States look forward to implementation of the 16th General Review of Quotas (GRQ) as soon as possible to maintain the Fund's current resource envelope and strengthen its quota-based nature. - EU Member States stand ready to engage in discussions on quota and governance reform in line with the Diriyah Guiding Principles; an ad hoc quota realignment may be more pragmatic than reviewing the formula; higher quota shares should come with commensurate responsibilities. ### SDRs, trust funding, and debt vulnerabilities - EU Member States have voluntarily pledged around USD 39 billion of Special Drawing Rights (SDRs) (or equivalent contributions) to the Resilience and Sustainability Trust (RST) and the Poverty Reduction and Growth Trust (PRGT) and have transferred around 97.5 per cent of their pledges. - Encouragement to IMF members to deliver on pledges and consider new voluntary contributions to bolster the PRGT and the RST and make resources effectively available for vulnerable countries. - Discussion of PRGT Financing Framework: continued exploration of ways to deliver assurances to ensure long-term self-sustainability. - Global debt vulnerabilities remain a critical area of focus. - Progress in implementing debt restructuring agreements under the G20 Common Framework (CF) is described as encouraging but needing further acceleration to enhance predictability, efficiency and timeliness. - The recently published illustrative MoU for the Common Framework by the G20 and the Paris Club is welcomed as a step to improve effectiveness, predictability and credibility of sovereign debt treatments. - Possible extension of the Common Framework to middle-income countries is noted as a potential measure, based on lessons learned. - Support for enhanced understanding and coordination among all creditor-types, including via the Global Sovereign Debt Roundtable, to facilitate debt restructuring processes and tackle emerging debt sustainability risks. - Emphasis on preventing debt crises through increased support to countries with sustainable debt and a strong reform and growth-enhancing agenda but facing short-term financing challenges, including by strengthening implementation of the IMF-World Bank 3-Pillar Approach and continued capacity development on debt management. *Statement by Mr. Harris, EU Council of Economic and Finance Ministers, Fifty-Fourth Meeting, is scheduled for October 16–17, 2026, International Monetary and Financial Committee* ### Strengthening debt transparency and data accuracy - Encourage further efforts from all stakeholders, including the private sector, to strengthen debt transparency. - Encourage efforts to enhance data accuracy, particularly through refined debt data reconciliation mechanisms. - Encourage broader participation in the WB Data Sharing Exercise. ### Multilateral creditor exposure in low-income countries - Note that the rising share of low-income countries’ debt owed to multilateral creditors, notably the IMF and the World Bank, warrants close attention. *IMF Ecofin section* ### Section 1 ### Statement by Mr. Harris — EU Council of Economic and Finance Ministers ### Global outlook and risks - The EU stands behind an open, fair, predictable, and rules-based multilateral system and is firmly committed to a strong, quota-based and adequately resourced IMF at the centre of the Global Financial Safety Net (GFSN). - The global economy faces major challenges related to policy uncertainty, trade tensions, wars and conflicts, including Russia’s illegal war of aggression against Ukraine, conflict in the Middle East, disruptions to key supply chains, energy security and fiscal vulnerabilities. - The ongoing conflict in the Middle East is described as a significant adverse shock, notably (via) energy markets, raising inflationary pressures, weakening confidence and weighing on activity. - Mitigating factors cited: release of strategic oil reserves, reconfiguration of production and trade patterns, fiscal support to households and the ongoing AI-driven investment cycle, particularly in the United States and Asia. - Warning on financial stability: developments on the funding side (in relation to both AI investments and government borrowing at long maturities) signal potential financial stability risks that should be closely monitored. - Risks to the outlook for growth are said to remain tilted to the downside. ### Trade policy and World Trade Organisation reform - The EU promotes a positive trade agenda balancing market openness and economic security, including supporting diversification of supply chains through trade partnerships and autonomous trade instruments where necessary. - Recent engagement examples: agreements referenced with Mercosur and India, and a new agreement with Australia. - The EU calls for a deep and comprehensive reform of the World Trade Organisation and states that it laid down its approach to WTO reform in three new papers tabled in July in Geneva. ### Global macroeconomic imbalances - Global macroeconomic imbalances have widened and warrant renewed policy attention. - Some imbalances reflect fundamentals (relative income levels, cyclical positions, demographics) and in an open, rules-based context are not per se problematic; persistent and excessive imbalances beyond fundamentals and stemming from distortions are a concern. - Preferred approach: cooperative, timely, and ideally simultaneous policy action, tackling unsustainable policies, distortions or rigidities to support orderly adjustment and avoid negative spillovers. - Large-scale non-market policies combined with macro measures and policies affecting exchange rate adjustment can materially affect savings-investment balances, amplify current account divergence, generate spillovers and hinder adjustment. - Statement: “Tariffs will not resolve global imbalances.” - Assessment: the euro area surplus has narrowed and is assessed as broadly in line with fundamentals. - Support for IMF: EU Member States support the IMF’s role in providing impartial and well-founded analysis, including updating and refining the External Balance Assessment model and further analysis of industrial policies, financial factors, managed exchange rate regimes and alternative rebalancing scenarios. ### Financial regulation and supervisory reform - The EU supports the G20 regulatory and supervisory modernisation exercise, advocating focus on simplification while preserving resilience and stability of the financial system. ### Ukraine — financial, military and reconstruction support - Principle: “There can be no negotiations on Ukraine without Ukraine, nor negotiations that affect European security without Europe’s involvement.” - The EU asserts it has stood by Ukraine and significantly stepped up financial, economic, humanitarian, military and diplomatic support, coordinating with like-minded partners and allies. - The EU and its Member States are described as Ukraine’s largest international donor, providing over EUR 216.7 billion in assistance. - On 24 February 2026, Regulation (EU) 2026/467 established the Ukraine Support Loan (USL) for 2026 and 2027 under enhanced cooperation, providing for a limited-recourse loan of up to EUR 90 billion to address Ukraine’s budgetary and defence needs. - USL structure: approximately two thirds allocated to military assistance, and the remaining one third provided as general budget support. - Disbursements to date under the USL: EUR 11.6 billion, comprising EUR 3.2 billion in macro-financial assistance and EUR 8.4 billion for defence procurement. - G7 Extraordinary Revenue Acceleration initiative: disbursements largely completed, providing Ukraine with approximately EUR 44 billion in loans out of the EUR 45 billion total package; these loans will be repaid using windfall profits from Russia’s immobilised central bank assets. - EU exceptional MFA loan under that initiative: EUR 18.1 billion, fully disbursed in 2025. - IMF engagement with Ukraine: new 48-month, extended arrangement under the Extended Fund Facility (EFF) amounting to USD 8.1 billion, underpinned by financing assurances from international partners. - Review and disbursement: completion of the first review of the arrangement on 20 July 2026 enabled the disbursement of approximately USD 690 million. - The IMF programme is described as key in anchoring expectations for macroeconomic stability, restoring debt sustainability and external viability, and promoting long-term growth in the context of post-war reconstruction and Ukraine’s EU accession path. - Call for Ukraine: accelerate structural reform efforts and implement reforms agreed under the IMF program, the Memorandum of Understanding (MoU) of the new EU Macro-financial assistance and the Ukraine Plan under the EU Ukraine Facility. ### EU macroeconomic and fiscal developments - The EU economy is said to have demonstrated a relatively high degree of resilience amid a challenging geopolitical environment and high uncertainty. - Inflation and growth outlook for the EU have become more uncertain due to the continuing conflict in the Middle East; the risk of broader economic fallout is described as elevated (structural trade and insurance costs, migration pressures and geoeconomic fragmentation). - Expected outcomes: EU economy is expected to continue to generate employment and real wage growth; investment is expected to rebound this year, also supported by the Recovery and Resilience Facility (RRF) in its last implementing year. - Euro area fiscal stance: expected to turn mildly expansionary in 2026, driven by the RRF and by growth in national current expenditure and nationally financed public investment, including for defence. - Monetary policy: the ECB is closely monitoring the intensity and duration of the Middle East shock and is setting monetary policy to ensure that inflation stabilises at its 2% target in the medium term. - NGEU/RRF disbursements: total amount of grants and loans disbursed by mid-September 2026 under the RRF reached EUR 440 billion, with 61.9% of grant support. - Policy priorities to enhance competitiveness and resilience: implementation of the Competitiveness Agenda based on the “Competitiveness Compass”; completing the Single Market; initiatives in clean industry, regulatory simplification, banking competitiveness, the EU Savings and Investments Union, innovation and R&D, targeted measures for strategic sectors and technologies including AI, and the “EU Inc. Initiative”. ### Energy, defence spending and renewables - Significant progress in renewable energy deployment since 2022 has helped contain the impact of the latest energy shock. - By 2025, renewable energy sources accounted for about 48% of the EU’s electricity consumption. - Many Member States have adopted measures to mitigate impacts on citizens and businesses. - The transition to higher levels of defence spending in the medium term is being facilitated by activation of the national escape clause (NEC) of the Stability and Growth Pact in many Member States; there is an opportunity to request extension in the scope of the NEC for defence to include measures that strengthen energy security. ### Climate action and sustainable finance - The EU links climate action, adaptation, sustainable development, deployment of clean technologies and industrial transformation to competitiveness and resilience. - Continued commitments: work with international partners for a just transition to a net-zero economy in line with the Paris Agreement; building on COP30 outcomes and preparations for COP31; support for ambitious Nationally Determined Contributions; accelerate mitigation, adaptation and resilience. - Commitment to implement the New Collective Quantified Goal (NCQG) to mobilise climate finance for developing countries and to mobilise climate finance from all sources and broaden the contributor base. - EU domestic goals: advance transition towards a climate-neutral economy by 2050 through continued implementation of the European Commission’s “Fit for 55” package and advance on the EU 2040 climate target. - The EU will continue to advance its Sustainable Finance Framework and promote mobilisation of private capital for transition and resilient investments. ### IMF policy issues, quotas, and resources - The IMF’s role is emphasised in promoting global monetary and financial cooperation and supporting countries in line with its mandate; EU Member States support implementation of recently completed policy reviews: Comprehensive Surveillance Review, Financial Sector Assessment Program Review, Review of the Bank-Fund Debt Sustainability Framework for Low-Income Countries and Review of Program Design and Conditionality. - Support for efforts to enhance effectiveness and catalytic role of IMF programs through robust and effective conditionality tailored to country-specific circumstances. - Continued Fund focus supported on macro-critical current and emerging challenges: climate change and ecosystem degradation, extreme weather events and natural disasters, pandemics, conflicts and fragility, as well as structural policies and reforms including gender and economic governance. - Quotas and governance: many IMF members have already consented to their quota increase; EU Member States look forward to implementation of the 16th General Review of Quotas (GRQ) as soon as possible to maintain the Fund's current resource envelope and strengthen its quota-based nature. - EU Member States stand ready to engage in discussions on quota and governance reform in line with the Diriyah Guiding Principles; an ad hoc quota realignment may be more pragmatic than reviewing the formula; higher quota shares should come with commensurate responsibilities. ### SDRs, trust funding, and debt vulnerabilities - EU Member States have voluntarily pledged around USD 39 billion of Special Drawing Rights (SDRs) (or equivalent contributions) to the Resilience and Sustainability Trust (RST) and the Poverty Reduction and Growth Trust (PRGT) and have transferred around 97.5 per cent of their pledges. - Encouragement to IMF members to deliver on pledges and consider new voluntary contributions to bolster the PRGT and the RST and make resources effectively available for vulnerable countries. - Discussion of PRGT Financing Framework: continued exploration of ways to deliver assurances to ensure long-term self-sustainability. - Global debt vulnerabilities remain a critical area of focus. - Progress in implementing debt restructuring agreements under the G20 Common Framework (CF) is described as encouraging but needing further acceleration to enhance predictability, efficiency and timeliness. - The recently published illustrative MoU for the Common Framework by the G20 and the Paris Club is welcomed as a step to improve effectiveness, predictability and credibility of sovereign debt treatments. - Possible extension of the Common Framework to middle-income countries is noted as a potential measure, based on lessons learned. - Support for enhanced understanding and coordination among all creditor-types, including via the Global Sovereign Debt Roundtable, to facilitate debt restructuring processes and tackle emerging debt sustainability risks. - Emphasis on preventing debt crises through increased support to countries with sustainable debt and a strong reform and growth-enhancing agenda but facing short-term financing challenges, including by strengthening implementation of the IMF-World Bank 3-Pillar Approach and continued capacity development on debt management. *Statement by Mr. Harris, EU Council of Economic and Finance Ministers, Fifty-Fourth Meeting, October 16–17, 2026, International Monetary and Financial Committee* ### Section 2 ### Section 2 ### Strengthening debt transparency and data accuracy - Encourage further efforts from all stakeholders, including the private sector, to strengthen debt transparency. - Encourage efforts to enhance data accuracy, particularly through refined debt data reconciliation mechanisms. - Encourage broader participation in the WB Data Sharing Exercise. ### Multilateral creditor exposure in low-income countries - Note that the rising share of low-income countries’ debt owed to multilateral creditors, notably the IMF and the World Bank, warrants close attention. --- _Source: https://www.imf.org/-/media/files/meetings/2026/annual/imfc/ecofin.pdf_