Italy is set to propose a 2027 budget plan that includes an additional deficit of approximately €7 billion, deviating from its previously agreed target with the European Union. The Italian government is seeking greater fiscal flexibility, particularly for defence and energy spending, before submitting its proposals to Brussels for approval.
Deputy Prime Minister and Foreign Minister Antonio Tajani highlighted the need for increased fiscal leeway due to the pressures of rising energy costs and defence requirements. Economy Minister Giancarlo Giorgetti elaborated that Italy intends to utilize the maximum flexibility allowed under EU rules, which includes 0.6% of GDP allocated for energy security and 0.9% for defence spending.
This move comes amidst broader economic challenges, as Prime Minister Giorgia Meloni has approached the European Commission to request more leniency, citing the impact of escalating inflation. The Italian government argues that these factors justify the need for additional fiscal space within their budgetary planning.
The European Commission has acknowledged that EU member states have existing access to additional flexibility under the bloc’s fiscal framework. However, Italy will have to present its spending proposals to Brussels to proceed with the planned deficit expansion. This step is necessary to align with EU expectations and regulations.