Italy is set to propose a budget plan for 2027 that seeks to increase its deficit by approximately €7 billion, deviating from previously agreed targets with the European Union. This move comes as the government aims to secure more fiscal flexibility for defence and energy expenditures.
Deputy Prime Minister and Foreign Minister Antonio Tajani revealed that Italy would pursue greater fiscal leeway before presenting its budget proposals to Brussels for approval. The government is seeking to leverage existing EU rules to accommodate extra spending, particularly for energy security and defence.
Economy Minister Giancarlo Giorgetti outlined Italy’s intention to request the maximum flexibility allowed, including allocations of 0.6% of GDP for energy security and 0.9% for defence. The government has justified the need for additional fiscal space due to rising energy costs and heightened defence requirements.
Prime Minister Giorgia Meloni has also joined in urging the European Commission to permit increased flexibility amid the backdrop of rising inflation. The European Commission has indicated that member states already have avenues for additional fiscal flexibility under the EU’s fiscal framework.
Italy will need to formally submit its spending proposals to Brussels to proceed with the planned budgetary adjustments. The outcome of these discussions will determine whether Italy can implement its ambitious fiscal plans while adhering to EU regulations.