Artificial Intelligence, Innovation, and Debt Sustainability in the Euro Area

Motivation
Rapid advances in artificial intelligence (AI) are reshaping productivity, innovation and economic governance. This conference will examine how AI-related technological change affects growth, fiscal outcomes, and debt sustainability in the euro area. AI can influence growth and public finances through several channels: productivity gains, labour-market disruptions, changes in tax capacity and tax base composition, and increased demand for redistribution and retraining. It also creates new risks linked to data security, cyber resilience and operational dependence on critical digital infrastructure. For the euro area, these effects are especially relevant because AI adoption and innovation capacity may differ across countries. Asymmetric growth effects could have implications for economic convergence, fiscal frameworks and EU-level coordination.

The conference will bring together academics, policymakers and practitioners to examine how artificial intelligence may reshape productivity, public finances and debt sustainability in the euro area. Particular attention will be paid to the magnitude and persistence of AI-driven productivity gains, the channels through which AI may affect fiscal outcomes and debt dynamics, the risks of uneven adoption and economic divergence across euro area countries, and the policy frameworks needed to manage the opportunities and challenges arising from the AI transition. 

Questions for discussions during the conference

1. How large and how durable can AI-driven productivity gains be, and how quickly can they spread from frontier firms to the aggregate economy?
2. Through which channels will AI affect public finances and debt sustainability, and could higher growth be offset by a rise in interest rates?
3. Could uneven AI adoption across euro area countries become a new source of divergence, and are current fiscal and EU coordination frameworks ready for it?
4. What new financial stability and operational risks does AI create, and who should be responsible for managing them?