IMF: AI Could Boost EU Productivity but Widen Inequality

An International Monetary Fund paper presented to European Union finance ministers this week estimates that artificial intelligence could lift European productivity by about 1% over five years, but warns of significant risks including widening inequality, strained power grids, and increased foreign technology dependency unless economic integration deepens. The background note, prepared for an informal meeting of EU finance ministers in Dublin on September 18-19, 2026, indicates that approximately 60% of workers in advanced European economies are employed in occupations highly exposed to AI. While some workers may see productivity gains through AI tools, others face displacement as routine tasks become automated, particularly in roles where AI is more likely to replace labor than complement it. The paper highlights that Europe's data centers already consume roughly 3% of the continent's electricity, and demand is expected to rise sharply with expanding AI use. Major technology hubs such as Frankfurt, London, Amsterdam, Paris, and Dublin are among the most exposed, with data center clusters already straining local power networks.