Meloni implores von der Leyen to let countries overspend to battle energy crunch
Italy has fallen foul of EU overspending rules, which it wants relaxed to deal with higher energy costs.
Italian Prime Minister Giorgia Meloni is urging the European Commission to loosen fiscal rules to assist countries grappling with the energy crisis. At a media event on Wednesday, Meloni announced she is writing to Commission President Ursula von der Leyen to discuss the matter during upcoming Ecofin and European Council meetings. Meloni argues that member states should be granted extra flexibility to support households and businesses amid rising inflation caused by high global energy prices.
European nations are grappling with elevated energy expenses stemming from the Iran conflict, and are apprehensive that mounting costs could jeopardize fragile economic growth and spur inflation. Inflation surged by a more substantial rate across primary eurozone economies in September. Italy's inflation rate jumped from 3.2% to 4.1% in the same period, according to preliminary data from the Italian Institute of Statistics.
Meloni emphasized that she is writing to von der Leyen to ensure the issue is addressed at the Ecofin meeting scheduled for next week in Luxembourg, followed by the European Council in two weeks. Gasoline prices have been a major political concern in Italy for weeks, putting the government in a precarious position. Political factions are already gearing up for a nationwide election next year.
Italy's government exceeds its income by approximately 3% of its GDP, breaching EU fiscal targets. Meloni's administration aims to meet the 3% benchmark next year, following its failure this year. Several other countries also exceed or approach the 3% threshold and Meloni may discover allies in the European Council for her call for increased fiscal space.
Greek Prime Minister Kyriakos Mitsotakis also penned a letter to von der Leyen, Council President António Costa, and Eurogroup President Kyriakos Pierrakakis on Wednesday, criticizing the call for countries to reduce energy consumption and urging more fiscal flexibility. Meloni reiterated that the matter has been raised at the Ecofin meeting, urging consideration of higher inflation when determining European targets and permissible deficits.
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