According to what we understand, the Council of Ministers gives the green light to the public finance planning document and the report on the deviation. According to reports, the government's request for flexibility is worth around 14 billion for 2027 and 14 billion for 2028. This is 0.3% of GDP for defense and 0.3% for energy per year.
"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.
"This deviation is quantified for 2027 at 0.3% for energy and 0.3% for safety, a similar forecast for 2028", explained the minister. "Compared to the intentions of a few weeks ago, we have decided to scale back the defense effort", he added, highlighting that "the deficit should remain below 3% also in 2026, but as you know it is not enough and our forecasts are, taking into account the additional spending allowed by European rules, that it will rise to 3.4% in 2027, 3.3% in 2028 and 2.4% in 2029".
Regarding the exit from the excessive deficit procedure, "it is not certain" that we will remain in the procedure. "The data for the 2027 and 2028 deficit are above 3% but they must be purified by the deviation relating to defense and energy and consequently if you purify 0.6% you will find a figure lower than 3%. The decimals make the difference and therefore the hope is to open up that space".
"I will not hide from you the attention with which we constantly monitor the situation of the trend of inflation and interest rates. The Italian proposal to consider the impact of inflation on the spending path is not created to ask for a different or further flexibility. It is simply done 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 path of nominal spending which is the objective given to us and therefore I believe that those who are a little expert in the matter can understand the type of complaint, which is not only from the Italian government but also from other European governments, that we have raised in terms of attention to Europe", he explained.
"As regards the debt path, the trend profile is at 138.1% in 2026, 138.6% in '27, 137.7% in '28 and 136.3% in 2029", he added. "With these numbers and taking into account a GDP growth that we have updated for 2026 to 1%, compared to the original prudent estimate of 0.6%, the programmatic growth rate stands at 0.8% in 2027, 0.9% in 2028 and 0.8% in 2029", he then reported.
On the hypothesis of ECB President Lagarde's resignation he commented: "For the ECB, I don't get into Governor Lagarde's head, I think it is appropriate also given the general situation to clarify things as soon as possible".
"At the moment there is no Italian candidate, Italy has already achieved great economic-diplomatic success with Carlo Comporti, president of Esma who will take office in the next few weeks" he recalled.
"I would say that already today at the Council of Ministers we will decide on the budget deviation and as is known, having obtained the possibility of greater flexibility in spending on defense and energy, we will be able to say today that there will be the deviation. I believe that we will be around 7 billion for this year", said the deputy prime minister and foreign minister Antonio Tajani in the morning at the 'Cities of the future 2030-2050' event, speaking of the measure. "We should present a series of proposals to Brussels and, once approved, we can be operational," he added.
"I hope that in Frankfurt they put their hand on their conscience and realize that the inflation that exists today is an exogenous inflation, not an endogenous one. Increasing the cost of money would only make the situation worse, precisely because it is not an inflation caused by us. So I hope that there is no increase in rates", Tajani then said at the 'Cities of the Future 2030-2050' event. "Although, I repeat, in Italy things are better than elsewhere and even the rating agencies are correcting. Fitch has positively corrected the prospects for our country".
Crosetto: 'I understand the reasons for the 8 billion less for defense'
"I perfectly understand the reasons that led to the choice, due to the economic period, inflation, the ongoing storm on sovereign bonds. The important thing is that the 0.3% for 2027, which had already been budgeted to this extent, is not touched and is used for the priorities identified by the Defense. For 2028, for now, an increase of a further 0.3 has been foreseen instead of the initial 0.6. I have taken note of this and I hope that the conditions of the 2027 allow for a subsequent increase in interventions. Thus to ANSA the Minister of Defense, Guido Crosetto, regarding the 8 billion less decided at the majority summit in extra expenditure for energy and weapons.
