The Managing Director of the International Monetary Fund, Kristalina Georgieva, warned European governments against further financial support towards protesting farmers across the continent, on Thursday, or they could come to regret it.
As reported by the French news agency AFP, Georgieva stated that she “understands, from a human perspective,” that farmers “face many difficulties” and that “it is not easy to do the work they do.” However, if the disposition towards subsidies “backs governments into a corner and prevents them from doing what is necessary to strengthen their economies, there is a risk that there may come a time when they regret it,” she added.
The ongoing protests by farmers in France and Germany have prompted responses from President Emmanuel Macron and Chancellor Olaf Scholz, leading to a series of announcements. In France, measures such as reinforcing the EGalim laws and implementing regulatory relaxations, coupled with an expenditure of approximately €400 million, have been unveiled by the government.
The IMF has been insisting for months that countries, especially the wealthier ones, should gradually phase out the support measures they had implemented to bolster their economies during the pandemic, subsequently to mitigate the inflationary shock and the consequences of Russia’s invasion of Ukraine.
The IMF has consistently emphasized the importance of countries maintaining fiscal flexibility to navigate economic shocks, given the significant rise in borrowing costs in recent years.
“Governments are under tremendous pressure to invest in competitiveness, the green economy, training, and talents for the digital economy. But where will all this money come from? Servicing debt is increasing. Your public support has increased for good reasons, and you are under pressure to continue spending,” insisted Georgieva.
