Washington, DC – The economic growth gap between the United States and Europe is expected to widen in the coming years, the International Monetary Fund (IMF) has warned, calling for urgent public investment in Europe to enhance productivity and maintain global competitiveness. In its latest World Economic Outlook, the IMF pointed to stronger-than-expected growth in the U.S. while the eurozone faces ongoing economic struggles.

The report highlights a significant contrast between the two regions. While the U.S. economy is benefiting from robust consumer spending and strong business investment, Europe’s major economies are being dragged down by persistent industrial challenges, particularly in manufacturing and real estate sectors.

Growth Projections: US Outpaces Eurozone

For 2024, the IMF has raised its growth forecast for the U.S. to 2.8%, a 0.2% increase from its July estimates, driven by consumer spending and business investment. Looking ahead to 2025, the U.S. economy is expected to slow slightly to 2.2% as fiscal policies tighten and the labor market cools.

In stark contrast, the eurozone’s growth is forecast to lag behind significantly. The IMF downgraded its 2024 growth outlook for the region to just 0.8%, a slight drop from its July forecast. While growth in the eurozone is expected to recover modestly to 1.2% in 2025, the forecast has been reduced by 0.3% from earlier projections.

Among Europe’s major economies, Germany and Italy are set to underperform. Germany’s economy is expected to contract by 0.3% in 2024, with no growth forecast for 2025. Italy is expected to grow by 0.7% in 2024, but its outlook for 2025 was revised down to 0.6%. Both countries are struggling with weak industrial output and real estate pressures. By contrast, France and Spain are performing relatively well. France is expected to maintain stable growth of 1.1% in both 2024 and 2025, while Spain’s growth forecast has been revised up to 2.7% in 2024 and 2.9% in 2025.

Calls for Public Investment in Europe

The IMF has called on European governments to increase public investment to tackle the continent’s slow growth. A report led by former European Central Bank President Mario Draghi emphasized the need for infrastructure, green technology, and productivity-enhancing projects to boost Europe’s competitiveness.

The IMF supported the Draghi report’s recommendation for a 1.5% rise in public investment from 2025 to 2030. This increase could lift eurozone GDP by up to 2.5% above baseline projections by the end of the decade. The investment surge would likely be funded through a mix of higher deficits and reallocating government spending, with the goal of attracting private investment and mitigating inflationary risks.

Economic Divergence

As the U.S. continues to outpace Europe in terms of economic growth, the IMF warns that without significant public investment, Europe risks entering a prolonged period of economic stagnation. While the U.S. is expected to maintain its growth momentum, European policymakers face the challenge of addressing structural weaknesses to prevent further divergence in global competitiveness.

PARIS, FRANCE — French pharmaceutical giant Sanofi has entered exclusive negotiations with U.S. private equity firm Clayton Dubilier & Rice (CD&R) regarding the partial sale of its subsidiary, Opella. The talks mark a significant step in Sanofi’s plan to sell a portion of Opella while maintaining a stake in the business.

The announcement follows the French government’s decision to acquire a 2% stake in Opella through the state-owned investment firm Bpifrance. The investment, valued between €100 million and €150 million, will also give the government a seat on Opella’s board.

As part of the deal, CD&R and Sanofi have made several key commitments to safeguard jobs and operations in France. Opella’s workforce in the country will be protected, with a €100,000 penalty for each job lost. The companies also agreed to maintain Opella’s headquarters and research and development (R&D) activities in France, with plans to invest €70 million in the country over the next five years.

The decision to sell a stake in Opella to a U.S. firm has sparked significant backlash in France. Concerns were raised earlier this month about potential job losses and the risk of medicine shortages. These fears have been heightened since the COVID-19 pandemic, which exposed vulnerabilities in pharmaceutical supply chains and led to public calls for increased onshoring of drug production.

Opella, known for producing France’s top-selling painkiller, Doliprane, holds a strong position in the domestic market. The potential sale has raised concerns about the future of French jobs and the stability of drug supplies. However, Sanofi has emphasized that it will retain approximately half of the business, allowing it to remain a key player in Opella’s future.

In its statement, Sanofi noted that the offer from CD&R is “binding and fully financed,” adding that the private equity firm has a long history of investment in Europe, including building French national champions and supporting local employment for over two decades.

Sanofi clarified that by remaining a major shareholder in Opella, it would continue to benefit from the company’s future growth. The partial sale values Opella at around €16 billion.

Pending regulatory approval from the French government, the transaction is expected to be finalized by the second quarter of 2025.

The deal underscores ongoing discussions in France about the importance of safeguarding national interests in critical industries like pharmaceuticals, particularly in light of recent global supply chain disruptions.