Italy is preparing to increase its budget deficit by approximately €7 billion in its 2027 fiscal plan, diverging from a previously agreed target with the European Union. The Italian government aims to secure more fiscal flexibility for defense and energy expenditures, a move anticipated to be approved before the proposals are submitted to Brussels for review.
Deputy Prime Minister and Foreign Minister Antonio Tajani has indicated that the government seeks to adjust its fiscal strategy in light of rising energy costs and increased defense needs. Economy Minister Giancarlo Giorgetti underscored this approach, stating that Italy intends to request the maximum flexibility allowed under EU regulations. This includes allocations of 0.6% of GDP for energy security and 0.9% for defense spending.
The Italian government’s argument for additional fiscal space hinges on the necessity to address higher energy prices and bolster defense capabilities. Prime Minister Giorgia Meloni has advocated for these adjustments, appealing to the European Commission for greater leeway amidst escalating inflation rates.
The European Commission has acknowledged that EU member states can access additional fiscal flexibility under the current framework. However, Italy is required to submit its detailed spending plans to Brussels for approval before implementing the proposed budgetary changes.