Key facts
- Italy's Economy Minister Giancarlo Giorgetti wants the EU to consider inflation when assessing budget deviations.
Italy's Economy Minister Giancarlo Giorgetti said the EU should consider rising inflation when assessing member states' deviations from budget goals. He argued that higher prices significantly impact fiscal plans and will raise the issue at a meeting of euro zone finance ministers.
Italy's push for greater fiscal flexibility highlights ongoing tensions between member states and the EU Commission over budget rules, particularly in the face of persistent inflation and energy cost pressures.
European Union authorities should consider rising inflation when assessing member states' deviations from budget goals, according to Italy's Economy Minister Giancarlo Giorgetti. He argued that higher prices can significantly affect governments' fiscal plans and stated that the EU Commission must take into account relevant factors such as severe external shocks when assessing whether to open or escalate infringement procedures against member states that fail to meet agreed spending goals.
Giorgetti said he would raise the issue of greater budget flexibility at a meeting of euro zone finance ministers this week. "We are not questioning the budget rules, but we are asking that the rules be adapted to today's reality," he said.
Italy had agreed its spending targets with Brussels assuming annual inflation of 1.8%. However, Italian inflation jumped to 4.1% in September from 3.2% the month before. "We must consider the relevant factors that in some way influence today's environment," Giorgetti said.
He added that the burden of energy costs could negatively impact next year's growth by no less than 0.2% of GDP. Italy will approve its 2027 budget next week.
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