Defence and energy, the Council also approves spending flexibility for Italy

Brussels – Green light for Italy’s spending flexibility in defence, with the possibility of measures in the energy sector as well: the Ecofin Council has given its final approval to the government’s requests for “extra” measures in the two sectors, much to the satisfaction of the Minister for the Economy, Giancarlo Giorgetti: “It was an Italian battle that will benefit all European countries wishing to make use of it.” 

The decision was a foregone conclusion, after Italy had secured the approval by the European Commission, and the Council’s go-ahead took place following a vote without debate. There were therefore no objections, and the government has secured a political victory, which the Treasury Minister was quick to claim credit for: “The national safeguard clause allows us to strengthen our defence capabilities and energy security, while adhering to the recommended net expenditure path and at the same time safeguarding the sustainability of public finances,” said Giorgetti, commenting on the go-ahead. 

The 2027 Budget Act, of which the clause forms an integral part, as the Minister for the Economy points out, provides for the use of the flexibility allowed by the flexibility clause for defence expenditure, up to a maximum of 0.3 per cent of Gross Domestic Product for both 2027 and 2028. In addition, a further margin, also amounting to 0.3 per cent of GDP for each of the two years, is earmarked for measures aimed at strengthening energy resilience. 

Flexibility is granted to Italy on condition that the overall deviation from the maximum rates of net expenditure growth does not exceed 1.5 per cent of GDP, and that the measure does not extend beyond 2028. Now that the go-ahead has been granted, it will be crucial to implement the special measure granted, with the European Commission due to assess the actual expenditure incurred for the individual measures at a later stage. Giorgetti is confident: “I am certain that the measures undertaken will meet the eligibility criteria.”