Italian Prime Minister Giorgia Meloni is urging the European Commission to relax fiscal rules, allowing member states more flexibility to support households and businesses facing high energy prices. Meloni plans to discuss the issue with Commission President Ursula von der Leyen and at upcoming Ecofin and European Council meetings.
The push for relaxed EU fiscal rules could impact the bloc's ability to manage sovereign debt and inflation, potentially leading to increased government spending across member states as they grapple with the energy crisis.
Italian Prime Minister Giorgia Meloni is calling for the European Commission to ease fiscal rules, enabling member states to provide greater support to businesses and households struggling with elevated energy prices. Meloni plans to formally address the issue with Commission President Ursula von der Leyen and advocate for its inclusion in discussions at the forthcoming Ecofin and European Council meetings.
Meloni stated that in the face of rising inflation, exacerbated by global energy price surges, it is essential to offer member states more flexibility for supporting their economies. European nations are grappling with increased energy costs, largely attributed to the conflict in Iran, and are concerned about the potential impact on fragile economic growth and inflation.
Across major eurozone economies, inflation accelerated in September. Italy, in particular, saw its inflation rate climb from 3.2% to 4.1%, according to preliminary data from the Italian Institute of Statistics. Meloni indicated her intention to ensure the matter is addressed at the Ecofin meeting scheduled for the following week in Luxembourg, and subsequently at the European Council summit in two weeks.
Gasoline prices have been a significant political concern in Italy for weeks, creating difficulties for the government. Political parties are reportedly preparing for a national election next year. Italy's government currently exceeds its income by over 3% of its GDP, breaching EU fiscal targets. Meloni's administration aims to adhere to the 3% target in the coming year, having not met it this year. Several other countries also operate at or near this threshold, suggesting Meloni might find support for greater fiscal flexibility within the European Council.
Separately, Greece's Prime Minister Kyriakos Mitsotakis also communicated with EU officials, including von der Leyen, Council President António Costa, and Eurogroup President Kyriakos Pierrakakis, requesting more fiscal leeway and urging consideration of higher inflation when assessing European targets and permitted deficits.
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