Italy and Greece have requested greater flexibility under EU fiscal rules amid rising fuel prices and inflation ahead of elections next year. Italian Premier Giorgia Meloni and Greek Prime Minister Kyriakos Mitsotakis each wrote to the European Commission seeking room to manoeuvre under deficit limits set at 3% of GDP. Meloni asked to use inflation-generated tax revenues to offset energy costs without breaching rules, and to treat inflation as a mitigating factor if Italy’s 2027 budget exceeds thresholds.
Mitsotakis called for more “breathing room” to fund temporary support measures using revenues from higher prices. Both countries already use exemptions allowing up to 1.5% of GDP for defence and energy spending. Rome has spent an estimated €2.5bn this year on fuel excise tax cuts, with Eni imposing a temporary price cap on pump prices.
EU officials warn markets may react negatively to added flexibility. The Commission declined to comment.
Source: Financial Times Companies · Summarized by HeadlinesBriefing