Italy to use EU budget leeway to fund energy-relief measures in 2027-2028

ROME: Italy plans to use the European Union’s so-called “escape clause” from the bloc’s ​budget rules to fund measures aimed at softening energy costs ‌in 2027 and 2028, a statement from Prime Minister Giorgia Meloni’s office said on Tuesday.

In a meeting between Meloni and senior coalition figures, there ​was “broad agreement” on a proposal to use the EU’s ​flexibility to help families and businesses cope with rising ⁠energy bills over the next two years, the statement said.

Following ​Russia’s invasion of Ukraine, the European Commission ruled in March 2025 ​that all EU member states could increase defence spending by up to 1.5% of GDP per year for four years through 2028 without triggering disciplinary ​action.

Italy pushed strongly for the Commission to allow fiscal ​leeway for EU governments to spend on cushioning the effects of more expensive ‌energy.

⁠As a compromise, the Commission last month decided to allow EU countries to use 0.3% of GDP, out of the 1.5% of GDP of extra leeway already allowed for defence, to pay for ​investment that would ​help the transition ⁠from fossil fuels to green energy.

Meloni’s plan to invoke the clause a year before a general ​election scheduled for 2027 suggests Italy is preparing ​to ⁠drop efforts to bring its budget deficit below the key 3% of GDP ceiling and exit the EU’s ongoing excessive deficit procedure.

⁠Under the ​latest multi-year budget framework unveiled in ​April, Italy had targeted a deficit-to-GDP ratio of 2.9% this year and 2.8% in ​2027.