IMF Warns AI Could Lift Europe's Productivity but Put Jobs, Equality and Power Grids Under Pressure

Artificial intelligence could increase European productivity by about 1% over the next five years, but the International Monetary Fund (IMF) warns that the benefits may come with significant economic and social pressures. An IMF paper prepared for an informal meeting of EU finance ministers in Dublin said AI could widen economic inequality, put additional pressure on electricity networks and increase Europe's dependence on foreign technology. Impact on jobs The IMF estimates that about 60% of workers in advanced European economies are employed in occupations highly exposed to AI. The impact will not necessarily be the same for everyone. Some workers could use AI to become more productive, while others could face displacement where AI automates routine tasks rather than complementing human labour. Energy demand AI is also creating an infrastructure challenge. European data centres currently consume roughly 3% of the continent's electricity, according to the IMF paper. The IMF says growing AI adoption could increase demand significantly, particularly around major data-centre hubs including Frankfurt, London, Amsterdam, Paris and Dublin. It recommends greater investment in cross-border electricity infrastructure and deeper integration of Europe's energy market. Europe faces a technology-dependence risk The IMF also warned that Europe could become increasingly dependent on AI technology developed in the United States and China. The report argues that deeper integration of the EU's single market could help spread AI adoption and its economic benefits more evenly across the bloc's 27 countries, while investment in Europe's own AI industry could reduce dependence on foreign technology. The warning comes as European policymakers increasingly focus on how to capture AI's productivity benefits while managing its effects on employment, infrastructure and economic competitiveness. Source: https://www.reuters.com/business/imf-tells-eu-ministers-ai-could-boost-growth-increase-economic-strains-2026-09-19