Italy’s government is set to approve a 2027 budget plan that includes an additional €7 billion deficit, deviating from its previously agreed target with the European Union. This move seeks to accommodate increased spending needs in sectors like defence and energy.
Deputy Prime Minister and Foreign Minister Antonio Tajani has indicated that the government will seek greater fiscal flexibility for these areas before submitting its budget proposals to Brussels for approval. Economy Minister Giancarlo Giorgetti elaborated that Italy would request the maximum flexibility available under EU rules, citing allocations of 0.6% of GDP for energy security and 0.9% for defence spending as part of the plan.
The Italian government contends that higher energy costs and heightened defence requirements necessitate this additional fiscal room. Prime Minister Giorgia Meloni has further urged the European Commission to allow greater flexibility in light of rising inflation pressures.
The European Commission has acknowledged that EU member states have access to increased flexibility within the bloc’s fiscal framework. However, Italy will need to formally submit its spending proposals to Brussels before proceeding with plans for the additional deficit.