Bank of Italy governor Andrea Brandolini warned Prime Minister Giorgia Meloni’s cabinet that fiscal discipline cannot be relaxed. The central bank’s call arrives as the government prepares its 2025 budget, a document Brussels will scrutinize for compliance. Brandolini stressed any slip could jeopardize adherence to EU fiscal rules, which bind member states to deficit and debt limits.

Eurozone watchdogs have signaled readiness to enforce corrective measures if Italy breaches the 3% deficit ceiling. Investors track the budget plan closely; perceived laxity could spike sovereign spreads and depress the bond market. Such a scenario would also ripple through Italy’s banking sector, tightening loan conditions for firms. A deficit procedure would pressure the European Central Bank’s stance as yields feed into euro‑area financing conditions.

Rome walks a tightrope, trying to sustain demand while curbing excesses to dodge an EU sanction. Treasury officials now must align political promises with the central bank’s caution, or face higher borrowing costs. Analysts estimate a breach could add several hundred million euros to financing over the next fiscal year, and Brandolini’s warning will shape Italy’s upcoming budget tone.