Rome seeks more leeway from Brussels as the Council of Ministers sets the deviation

Premier Giorgia Meloni has written to European Commission President Ursula von der Leyen to ask for more spending leeway ahead of the 2027 budget, arguing that with the limited room allowed under European budget rules it will not be possible to help families and businesses without resorting to restrictive measures. Brussels replied that it has already granted member states more flexibility, thus opening a debate that intertwines with the approval, in the same period, of the Public Finance Programming Document by the Council of Ministers.

In the letter, the premier cites in particular pensions and index-linked benefits, quantifying at 20.4% of Gross Domestic Product the share of Italian public spending exposed to inflation above forecasts, and asks that Brussels take this into account when assessing Italy’s accounts. The document is also backed by a joint text presented together with the Czech Republic, and is intended for the European Council convened for 15 and 16 October, the meeting at which the Italian request will receive its first political response.

At the same time, the Council of Ministers approved the Dpfp, the document that updates public finance forecasts ahead of the next budget law. The text provides for overall room of up to about 29 billion euros over the 2027-2028 two-year period, stemming from a clause that for 2027 is worth 0.3% of GDP for energy spending and a further 0.3% for defense; for 2028 an additional margin of 0.6% of GDP is envisaged, to be allocated between the two items.

The public finance outlook outlined by the Dpfp indicates a deficit at 3.4% of GDP in 2027, falling to 3.2% in 2028 and to 2.3% in 2029. On the growth front, the GDP estimate for 2026 has been revised upward to 1%, compared with the 0.6% estimated last April, while for 2027 the forecast stands at 0.8%.

The double track — the request for flexibility addressed to Brussels on one hand, the deviation already set down in writing in the Dpfp on the other — shows how the government is preparing the 2027 budget on two parallel tables: the domestic one, where the Council of Ministers has already set the reference figures, and the European one, where the negotiation over budget margins will have to contend with the response the Commission has already given, describing the flexibility granted as sufficient. The European Council of 15 and 16 October will be the first occasion on which the two positions — the Italian one, also backed by Prague, and that of the Commission — will confront each other directly, with the margins quantified in the Dpfp serving as the concrete reference point around which the negotiation will play out.