Green light for the activation of Italy's national safeguard clause (Nec). The greater budget flexibility granted will allow Rome to increase spending on defense and energy security. The owner of the MEF: "It allows us to strengthen ourselves in compliance with the recommended net spending path and at the same time safeguarding the sustainability of public finances." Negotiations are still underway on the revision of tobacco taxes
The EU Ecofin Council has given the green light to the activation of Italy's national safeguard clause (Nec) for energy and defense measures. The greater budget flexibility granted will allow Rome to increase spending on defense and energy security. According to the provisions of the measure, the Nec will allow spending to increase up to 0.6% of GDP in each of the years 2027 and 2028, divided between 0.3% for defense and 0.3% for energy security. This is an overall flexibility of approximately 29 billion euros over the two-year period, equal to approximately 14.5 billion per year.
Giorgetti: “Satisfied with the activation of Italy's NEC”
"We welcome with satisfaction the approval" of Italy's national safeguard clause (NEC) by Ecofin. "It allows us to strengthen defense capabilities and energy security, respecting the recommended net spending path and at the same time safeguarding the sustainability of public finances", said the Minister of Economy Giancarlo Giorgetti, according to what was communicated by the Mef. "We claim the inclusion of energy in the NEC with strength and pride. It was an Italian battle that will be useful to all European countries that want to make use of it."
Giorgetti: “In-depth discussions with the Commission on energy measures”
"We have conducted in-depth discussions with the Commission regarding the energy security measures that we intend to implement by making use of the flexibility provided for by the national safeguard clause", said Giorgetti. “Such interventions mainly concern the development of energy production and storage from renewable sources, the energy efficiency of schools, hospitals and other public buildings, as well as sustainable mobility such as local transport and railway infrastructure,” he explained. "Implementation will be a crucial aspect: the Commission will have to evaluate, ex post, the actual expenditure incurred for the individual measures; I am sure that the interventions undertaken will respect the eligibility criteria". To this end, Giorgetti concluded, "Italy will provide six-monthly updates on the measures for which the application of flexibility is requested".
The figures
In the request presented on 11 September, the government indicated an overall increase in defense spending of up to 0.9 percentage points of GDP by the end of 2028, compared to a level of 1.3% recorded in 2024 and essentially stable until 2026. According to the document approved by EU ministers, the increase will concern new multi-annual investment programmes, but also higher current expenditure, including those for military personnel and operational costs. Military purchases financed through European loans from the Safe program will also benefit from the flexibility.
The interventions
On the energy security front, the government has presented an initial list of interventions which includes the electrification of homes, the improvement of the energy efficiency of public and private buildings, including schools, universities and healthcare facilities, and the installation of photovoltaic systems. There are also incentives aimed at investments in decarbonisation, interventions for railways, public transport and sustainable urban mobility, as well as the strengthening of renewable energy production, storage systems, the flexibility of the energy network and biofuels. The individual energy measures will however have to be subjected to verification by the European Commission, which will evaluate their admissibility and impact on public finances. For defence, the flexibility may also extend beyond 2028 for deliveries of military equipment purchased with contracts signed by that date, in compliance with the overall ceiling.
The tobacco tax reform
At Ecofin, chaired by the Irish Finance Minister Simon Harris, the other test case is the reform of tobacco taxation. The EU presidency is aiming for a political agreement to increase European minimum excise duties and extend them to new products, including e-cigarettes and nicotine sachets. The new mediation seeks to overcome the resistance of some countries, in particular Sweden and Spain, but unanimity is required for the agreement. At the moment we are still negotiating because there is no unanimous agreement.
Giorgetti: "Italy supports EU compromise on tobacco taxation"
Italy supports the compromise proposal of the Irish Presidency of the EU Council on the revision of European rules on tobacco taxation, announced the Minister of Economy Giancarlo Giorgetti at Ecofin, in the public session of the meeting. "Due to the need to find an appropriate balance between various objectives, as well as to reconcile different requests while also taking into account the economic reality, the changes made by the Presidency with regard to the definitions of tobacco products and, lastly, to the treatment of raw tobacco are acceptable to us - he stated - but should not be further revised". "With respect to the document distributed relating to nicotine sachets, considering the sensitivity of the issue for some member states, including Italy, we agree with the Presidency's proposal". “So, overall, we believe that the Presidency's compromise text ensures the balance between the different needs and therefore we can support it,” Giorgetti concluded.
