Europe Asia News

IMF chief Kristalina Georgieva said Europe is not doomed to inevitable decline and is in fact in better shape than many realize.

Much of the EU policy-making bubble has fallen into despondency since the recent clash with the United States over Greenland exposed the bloc’s vulnerability.

Georgieva said that even though U.S. President Donald Trump ultimately backed down, if the White House had truly wanted to take Greenland, Europeans would have had no choice but to accept it—adding that pessimism is unwarranted.

She noted that in The Economist’s year-end list of top-performing economies, seven of the top ten are EU members, with Portugal in first place; the Iberian economy has posted steady growth in recent years while comfortably servicing its debt.

Even before the Greenland crisis, a sense of gloom prevailed at the highest levels of Europe’s economic decision-making. Former ECB president Mario Draghi warned of “slow pain” without reforms.

Georgieva acknowledged that countries are acting more forcefully, leaving little room for multilateral institutions like the IMF, and said the world has become “multipolar.”

Speaking to Politico, she said geopolitical factors are playing an increasingly large role in shaping the global economy, and that it has become harder for allies to protect shared goals.

Still, Georgieva stressed that Europe’s destiny is in Europeans’ hands, and that IMF advice mirrors the recommendations in Draghi’s 2024 competitiveness report: strengthening the single market, cutting red tape for businesses, and integrating fragmented energy and financial systems.