Italy plans to exit EU budget deficit procedure ahead of schedule

Italy’s Economy Minister Giancarlo Giorgetti states the country plans to exit the European Union's excessive budget deficit procedure ahead of schedule, as early as 2026. The move could come if the deficit falls below the EU’s 3% ceiling. According to updated data, Italy’s budget deficit will hit 3.3% of GDP in 2025, compared with the expected 3.4%.

The Italian government had previously agreed on a plan to narrow the fiscal gap to 2.8% by 2026, with no additional tax hikes or spending cuts required. Giorgetti says the data for the first half of the year confirms that the deficit level of 3.3% has been reached, and with favorable dynamics of GDP and spending, the procedure could be exited next year.

The minister also stated he was in talks with the European Commission on flexibility in budget control rules related to defense investments. That would allow for increased spending on strategic projects without the risk of triggering disciplinary steps.