Prime Minister Giorgia Meloni said Italy wants the European Union to allow more flexibility in its fiscal rules to account for inflation driven by higher energy costs. Annual inflation climbed to 4.1% in September from 3.2% in August, amid public concern about the cost of living and a year before national elections.
Meloni said she would write to European Commission President Ursula von der Leyen to put the issue on the agenda of upcoming meetings. She also plans to allocate €14 billion over two years to lower energy costs for businesses, using the EU's national escape clause, or NEC.
Italy announced in August that it would use the NEC to secure an additional deficit margin equal to 1.5% of GDP, of which 0.6 percentage points would go to projects to lower energy bills. The clause has been offered to all EU countries to help them increase defence spending and respond to energy-cost pressures linked to the war involving Iran.
Meloni argued that higher inflation should be considered when the EU calculates permitted deficit parameters. Her government wants the issue discussed at October meetings of finance ministers and national leaders. Italy is due to present
Rome is expected to reaffirm its commitment to cut the deficit from 3.1% of GDP to below the EU's 3% limit, potentially clearing the way for Italy to exit the bloc's excessive-deficit procedure in mid-2027. At the same time, Meloni's push for more flexibility suggests the government is seeking room to raise the deficit over the next two years. With elections due next year, added fiscal capacity could fund support measures. Meloni said she intends to remain in office until the end of her term.