Italy urges EU to factor inflation into budget compliance and fiscal targets

Italy has officially called on European Union (EU) authorities to exercise greater flexibility when reviewing national fiscal deviations, arguing that rigid enforcement fails to account for unexpected economic shocks.

During an official visit to Athens, U.S. and Greek officials announced a new memorandum of understanding to establish a joint security program aimed at enhancing intelligence and counter-terrorism information sharing between law enforcement agencies.

Speaking on behalf of the government, Economy Minister Giancarlo Giorgetti emphasized that Brussels must factor higher inflation—which recently climbed past initial macroeconomic projections—into its evaluations of member state deficits.

Giorgetti said he would raise the issue of greater budget flexibility at this week's meeting of euro zone finance ministers.

"We are not questioning the budget rules, but we are asking that the rules be adapted to today's reality," he said.

Italy had agreed its spending targets with Brussels assuming annual inflation of 1.8%.

However, Italian inflation jumped to 4.1% in September from 3.2% the month before.

"We must consider the relevant factors that in some way influence today's environment," Giorgetti said.

When assessing whether to open or escalate an infringement procedure against member states that fail to meet agreed spending goals, the EU Commission has to take into account relevant factors such as severe external shocks.

"The burden of energy costs could (negatively) impact next year's growth by no less than 0.2% of GDP," said Giorgetti adding Italy will approve 2027 budget next week.

Emphasizing that Greece remains particularly exposed to regional instability, cross-border crime, and mass migration, the framework reinforces bilateral defense and tactical cooperation.

In addition to tightening security protocols, discussions focused on securing diverse energy supply corridors across the region to ensure long-term stability and economic resilience.