We have approved the Dpfp which arrives 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 of the Ministers which gave the green light to the Public Finance Programmatic Document and the report on the deviation.
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"This deviation is quantified for 2027 at 0.3% for energy and 0.3% for safety, a similar forecast for 2028", explained the Minister of Economy Giancarlo Giorgetti. "Compared to the intentions of a few weeks ago we have decided to reduce the defense effort", he added.
"The deficit should also remain below 3% in 2026, but as you know it is not enough and our forecasts, taking into account the additional spending allowed by European rules, are that it will rise to 3.4% in 2027, 3.3% in 2028 and 2.4% in 2029", said Economy Minister Giancarlo Giorgetti. "I do not hide the attention with which we monitor the situation of both rates and inflation," he added.
On exiting the procedure for excessive deficit, it is not a given that one remains in breach: "The 2027 and 2028 deficit data are above 3% but must be adjusted for the deviation relating to defense and energy and consequently if you remove 0.6% you will find a figure lower than 3%. Decimals make the difference and therefore the hope is to open that space", said the Minister of Economy Giancarlo Giorgetti in a press conference.
"I will not hide from you the attention with which we constantly monitor the situation of inflation and interest rates", Giorgetti further explained. "The Italian proposal to consider the impact of inflation on the spending path was not created to ask for different or further flexibility. It is done simply to draw attention to the fact that the spending path - and therefore the targets that were given to individual national countries and individual governments exactly 3 years ago with a profoundly different expected inflation rate - cannot fail to consider the different impact that inflation has had on the nominal spending path which is the objective that is given to us and therefore I believe that anyone who is even an expert in the matter can understand the type of complaint, which is not only from the Italian government but also from other European governments, which we have posed in terms of attention to Europe".
Yesterday was marked by the debate on the flexibility of accounts at a European level: the rise in inflation seems destined to exceed the 3% threshold at the end of the year, thus restricting the spending margins for the government in the Budget Law at the end of the legislature. Giorgia Meloni wrote a letter to the European Commission, underlining that in these conditions, with the "limited space" granted by the spending rules, it will not be possible to help families and businesses without "restrictive measures".
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The text of Meloni's letter to the EU states that "in the Italian case, the amount of spending directly affected by inflation significantly higher than the forecasts underlying the budget plan is equivalent to 20.4% of GDP. Other components of spending that will be affected by the increase in inflation already in 2027 represent 12.0% of GDP". And therefore "we believe that the fiscal framework leaves the European Commission some margin to take into account the relevant factors in the ex ante assessment of compliance with the spending rule, as part of the examination of the upcoming Budget Plans".
Addressing European Commission President Ursula von der Leyen, Giorgia Meloni added that "the temporary increase in indirect tax revenues resulting from increased inflation cannot be used to finance compensatory fiscal measures, unless a Member State has margins within the agreed net expenditure path". And "such support measures are classified as discretionary changes in revenue. Although this feature of the EU fiscal rules is aimed at making public finances sound in the medium term, we should still look for ways to use at least part of the additional revenue to temporarily and in a targeted way mitigate the increase in energy costs."
Today the spokesperson of the EU Commission Balazs Ujvari in the press briefing said that "yesterday we received the letter from Prime Minister Meloni relating to further fiscal flexibility and we will examine it in detail, as usual. We will subsequently formulate our assessments and our position". The spokesperson underlined that this letter "is part of the discussions to prepare for the next European Council in October". Yesterday, however, spokeswoman Paula Pinho, when asked about Italy's request for greater flexibility in light of the high levels of inflation before receiving Meloni's letter, underlined that the Commission has "already given more flexibility to the member states".
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