EU exec rejects Greek, Italian requests for more fiscal rules flexibility
EWG•The European Commission rejected requests from Italy and Greece for more flexibility in EU fiscal rules to address inflation and temporary energy support measures. Commissioner Valdis Dombrovskis said inflation is already considered in compliance assessments and rules cannot be changed all the time.
1. Commission rejects requests
Italian Prime Minister Giorgia Meloni asked the Commission to account for higher-than-expected inflation in permitted deficit calculations and when evaluating spending deviations. Rome also argued that member states should be allowed to use extra tax revenue generated by inflation to help counter energy costs.
2. Greek proposal and response
Greek Prime Minister Kyriakos Mitsotakis urged the Commission to exempt temporary support for households and businesses from the EU’s maximum net expenditure limit. Dombrovskis said upward inflation pressures are already part of assessments of compliance with fiscal rules, adding that frequent new flexibilities could cast doubt on the commitment to fiscal sustainability.
3. Existing fiscal leeway
The Commission has already granted EU countries leeway in their fiscal consolidation paths to account for higher defence spending and measures to reduce reliance on fossil fuels.
