Overview
- Italy, which on Wednesday had its 2025 deficit fixed at 3.1% of GDP by ISTAT, will stay in the EU’s Excessive Deficit Procedure, a process that puts budgets under extra oversight.
- The government’s new multi‑year plan projects the deficit easing to about 2.8% in 2026 and 2.6% in 2027 under an unchanged‑policy scenario.
- Rome cut its growth outlook to roughly 0.5–0.6% this year and about 0.6–0.7% next year, citing higher energy costs and the conflict in the Middle East.
- EU officials have refused to revive the bloc‑wide escape clause that paused budget rules during COVID, and Italy may instead seek a national exception tied to exceptional shocks.
- The plan warns that tight finances could force a rethink of planned defense increases as the government prioritizes support for households and firms facing steep energy bills.