The grip of inflation also grips the budget. The September flare-up, with the annual figure already projected above 3%, risks narrowing spending margins and the government is alarmed.
Prime Minister Giorgia Meloni sends a warning to the EU: in these conditions, with the "limited space" granted by the rules on spending, families and businesses will not be able to be helped without "restrictive measures". Brussels, even before receiving the letter from Rome (which arrived in the evening), immediately puts its hand forward: "We have already given more flexibility to the member states".
The topic was at the center of a two-hour summit at Palazzo Chigi, during which the next steps towards the maneuver were also taken stock, starting from the framework of the public finance planning document expected in the CDM. In this scenario, the Mef calls for "seriousness", announcing a "difficult" adjustment, also in light of the trend of government bonds and the rise in yields. Faced with a spread that has reached 118.5 points, concern is high. The special observation is inflation.
The letter announced by the Prime Minister is now on the Commission's table. Meloni, addressing Ursula von der Leyen, starts from the "Italian case", which has expenditure directly affected by inflation above estimates equal to 20.4% of GDP. Added to which are other spending components that will be affected as early as 2027, equal to 12.0% of GDP. The most obvious example is that of pensions, cites the Prime Minister, who launches her appeal to Brussels: "We believe that the fiscal framework leaves the European Commission a margin to take into account the relevant factors in the ex ante evaluation of compliance with the spending rule".
An "urgent" and non-postponable issue, which does not only concern Italy and which, according to Meloni, should be discussed - he suggests - at the next Ecofin meeting, scheduled for 9 October. But the letter also contains another proposal: finding a way to use "at least part" of the extra revenue deriving from the high prices to "temporarily and in a targeted way mitigate the increase in energy costs".
A position, the Italian one, which Giorgetti has already spoken about with his European colleagues, but at the moment there is great caution in Brussels: Italy - this is the reasoning used in Commission circles - has already had the Nec (the energy and defense clause) and it is too early to use anything else, also because this would mean calling everything into question. The surge in prices, together with the rise in BTP yields, meanwhile creates some headaches for the Mef.
"With all sincerity I must tell you it will be a difficult budget law", admits deputy minister Maurizio Leo, who hopes that the EU "understands this situation and comes to our aid". But in the majority there are also those who read the context with less caution: "In a complicated moment in which inflation is rising again you have to make an important, courageous maneuver", ventures the leader of the League Matteo Salvini. Giorgetti responds to everyone by keeping the bar straight: the maneuver will be "serious".
The first framework will come with the Public Finance Policy Document, the old Nadef. On the basis of the unitary resolutions of Parliament - which after the approval of the commissions will be examined in the Chamber on 13 October - it will have to contain the programmatic macroeconomic framework and also an initial outline of the measures envisaged in the budget, with the "related financial effects". On the numbers front, the expectation is for an upward revision of growth in 2026: the forecasters' updated estimates agree on +0.8/+0.9 and it is therefore probable that the prudential +0.6% set in April will be adjusted upwards.
The 2026 deficit will instead have to remain below 3% if, as promised by Giorgetti, the objective is to exit the procedure next year. The menu of the maneuver should start, constraints permitting, from the extension of the cut of the second Irpef rate for incomes up to 60 thousand euros, but the focus is also on the 5% flat tax for salary increases for young people and on flat tax (with limitations) for shops.
Confirmation of the 50% home bonus for first homes is also possible, but work is still being done to further raise the bar, says Leo: we are looking at 65%. The maneuver is intertwined with the issue of the escape clause for flexibility on energy and defence. The government is inclined to activate it and together with the DPFP it should present an ad hoc report, which will then be voted on with the relative deviation. The date is already set for October 13th.
