IMF chief urges EU to harmonise VAT and preserve emissions‑trading scheme

International Monetary Fund Managing Director Kristalina Georgieva told journalists in Brussels that the European Union should move toward a common value‑added tax system and maintain its emissions‑trading scheme. She said the current VAT and emissions‑trading structures work well, but deeper alignment would strengthen the single market.

Georgieva warned that public spending on fuel‑price relief must be temporary and targeted, noting that around 80 % of measures are not yet adequately focused. She added that Europe can achieve energy independence only by expanding renewable sources and that producers of nuclear or renewable energy are less vulnerable to price shocks. The IMF also backed the European Central Bank’s policy to tame inflation, while cautioning that a recession could follow if the current energy‑price crisis is not resolved within months.

In response to a question, she emphasized, “Politicians must act not based on hopes but with prudence.”