DUBLIN (Waagacusub.net) — The International Monetary Fund has warned European policymakers that the rapid expansion of artificial intelligence could boost economic productivity while also disrupting labour markets, widening inequality, straining electricity networks and increasing Europe's dependence on foreign technology.

The assessment was presented as EU finance ministers gathered for an informal meeting in Dublin on September 18–19.

Around 60% of jobs in advanced economies are exposed to AI, according to IMF estimates. The impact, however, is unlikely to be uniform.

For many workers, AI could complement existing skills and increase productivity. For others—particularly where tasks can increasingly be automated—the technology could reduce demand for certain forms of work, alter job responsibilities or place downward pressure on employment and earnings.

Productivity Gains — But Uneven Benefits

The IMF estimates that AI adoption could increase European productivity by around 1% cumulatively over the next five years.

Those gains could vary significantly between countries.

Higher-income economies and countries with stronger digital infrastructure, investment capacity and technology-intensive industries may be better positioned to capture the benefits.

The IMF has argued that deeper integration of the EU single market could help European companies scale more effectively and spread the economic benefits of technological investment across the bloc.

AI Is Putting Pressure on Europe's Power Infrastructure

The AI expansion also presents a growing energy challenge.

Data centres require enormous amounts of electricity, and demand is expected to increase as AI models become larger and computing infrastructure expands.

The pressure is particularly significant in major European data-centre hubs, where electricity networks are already facing capacity constraints.

The IMF says greater investment in electricity generation, transmission infrastructure and cross-border energy integration will be increasingly important as AI-related power demand grows.

Europe Faces a Strategic Technology Challenge

Europe also faces a broader question of technological independence.

Much of the world's most advanced AI infrastructure and technology is being developed outside the European Union, creating the risk that Europe becomes increasingly dependent on foreign providers for technologies likely to play a central role in future economic growth.

Expanding European investment, strengthening innovation and enabling technology companies to scale across the single market will therefore be critical if the continent wants to capture more of the economic value generated by AI.

The IMF's assessment highlights the central dilemma facing European governments: AI could become an important new source of productivity and economic growth, but the benefits will depend heavily on how Europe manages labour-market disruption, energy demand, investment and technological dependence.

By Dahir Alasow

Waagacusub.net
Dublin | 19 September 2026