Il Sole 24 Ore44 minutes agoPolitics2 min readItaly

Council of Ministers approves Dpfp and deviation: 7 billion per year for energy and defense

Quick Look

The Council of Ministers approved the public finance planning document and the report on the deviation, confirming the agreement on the national safeguard clause for 7 billion per year allocated to energy and defense for the next two years.
2026 GDP is forecast at 1%, with a deficit under 2.9%.
Giorgetti underlines the complexity of the context and the difficulty of making predictions.

AI-generated summary

Why It Matters

The public finance planning document (DPFP) and the report on the deviation are instruments of economic and financial planning of the State. The approval comes amid high inflation and negotiations with the European Union for greater budget flexibility.

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Green light from the Council of Ministers for the Public Finance Policy Document (DPFP) and the report on the deviation. The agreement between the majority leaders on the partial use of the national escape clause for energy and defense spending has been formalised. The spending commitment for the extra trade deficit is divided exactly in half for the two items: 7 billion per year for the next two years, for a total of 28 of the 36 billion hypothesized in August, before Istat confirmed that the 2025 deficit has reached 3.1% of GDP. A solution that satisfies those in the centre-right who were calling for a significant reduction in the chapter dedicated to security and rearmament.

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All this while negotiations have opened with the EU on the request for additional flexibility to react to inflation, contained in the letter sent on Thursday by Prime Minister Giorgia Meloni to the President of the EU Commission, Ursula von der Leyen. A negotiation that promises to be uphill given that the EU has made it known that "in reality it has already granted greater flexibility to the member states".

Giorgetti: Dpfp in a complex context, it is increasingly difficult to make predictions

«We have approved the Dpfp which comes in a particularly complex context in many respects so making forecasts becomes increasingly complicated» said the Minister of Economy Giancarlo Giorgetti in a press conference after the meeting that approved the Dpfp

GDP 2026 updated to +1%, deficit within EU limits

Trends will indicate higher growth than expected this year, at 1%, which will however be followed by a duller 2027, around +0.6%. The 2026 results could reduce the deficit even below the 2.9% forecast in April, also because growing inflation (+4.2% on an annual basis in September) fuels nominal GDP. The revision of GDP levels carried out by Istat will also help to cut this year's debt a few decimals below the 138.6% calculated in the spring. The Dpfp and deviation numbers, which will only come to the vote on Tuesday 13th, will define the framework of the maneuver. Which will be "serious", Giorgetti wanted to reiterate yesterday

What to Watch

AI outlook — possibilities, not facts

The Dpfp and the deviation will be voted on on Tuesday 13th and will define the framework of the budget maneuver.
Very likely · Within days
2026 GDP could reach 1% and the deficit could fall below 2.9% thanks to nominal growth fueled by inflation.
Possible · Within months

Open Questions

What will be the concrete effects of using the national escape clause on public debt?
How will the European Union react to Italy's request for additional flexibility?
What will be the repercussions on the budget following the approval of the Prime Ministerial Decree?