Italy sees exit from EU deficit concerns

No more recommendations, observations, or interventions to implement. Italy is seeing its exit from the excessive deficit procedure that the EU activates for countries needing to correct their deficits. The nightmare threshold for an Economy Minister is 3%, and Italy aims to exit it by 2026. Economy Minister Giancarlo Giorgetti discussed the matter with EU Economy Commissioner Valdis Dombrovskis, initiating discussions regarding the exit. He then announced it to the Senate during question time, where he addressed the topic of defense. The minister explained that there is an asymmetry of judgment between those entering and exiting the EU deficit procedure, and also reassured the public that the accounts will be sound.

"For the first time, there's no talk of a corrective measure in the Budget Law: miraculously, we made the right forecasts," he smilingly concluded, echoing the concept he had just expressed more academically: "Based on the data published by Istat on June 30, there is no reason to believe it's necessary to adjust these forecasts. The figures are compatible with a deficit of 3.3% in 2025 and a return to below 3% in 2026." So, no second budget, but above all, a 2026 that takes us outside the scrutiny that the EU applies to countries that are a bit more undisciplined with their finances.

"Exiting the procedure," concludes Giorgetti, who certainly does not forget his political pedigree, "is not just a matter of esteem and self-esteem, but also of overcoming recommendations, which make headlines every year and are also politically troublesome, regaining room for manoeuvre and opportunity." Discussions are ongoing. EU Commissioner Dombrovskis also confirms this: "We are also discussing another option with the Italian government, namely, exiting the excessive deficit procedure and seeing how we can make this clause work for Italy. We are in constructive discussions and will find solutions that will allow Italy to increase defense spending." This is precisely the crux of the matter. Italy contests an asymmetry in the rules that would penalize our country, but the EU is working to provide interpretations that will clarify the situation. Currently, however, a country with a deficit below 3%, if it rises above this threshold due to new defense commitments, will not enter the excessive deficit procedure; While a country like Italy, which has significantly reduced its deficit and remains just above the threshold to finance its defense commitments, risks not making it. These commitments, such as the 5% spending target, are "an ambitious goal," Giorgetti admits, but the government intends to achieve them "while safeguarding spending items geared toward growth and economic and social well-being, such as those for families and social services."