Italy, Czech Republic, and Greece push EU for energy price relief and budget flexibility

Rome and Prague coordinate on carbon market reforms

The prime ministers of Italy and the Czech Republic agreed on Wednesday to present a joint package of policy proposals at the upcoming European Union leaders' summit to ease energy and carbon prices across member states. Announced by the Czech government office on 30 September, the bilateral initiative seeks targeted revisions to European Union climate and energy trading frameworks.

The joint Czech-Italian proposal focuses on six interventions within the European carbon market. The package requests changes to the operational rules of the European Union's carbon credit reserve pool and calls for increased flexibility in distributing free emissions allowances to energy-exposed industries. Both governments also proposed temporary measures to reduce the financial impact of carbon prices on electricity generation, regulatory relief regarding methane emissions standards, enhanced monitoring of speculative market positions in carbon allowances, and a formal postponement of the implementation of the second phase of the EU emissions trading system (ETS).

Demands for European budget flexibility

Alongside regulatory proposals on carbon markets, leaders from southern and central Europe called for broader fiscal leeway from European institutions to help businesses and households manage elevated energy expenses. Italian Prime Minister Giorgia Meloni stated that Italy plans to ask the European Union for greater fiscal flexibility, pointing to inflation increases driven by high energy prices across the region's largest economies.

Greek Prime Minister Kyriakos Mitsotakis also appealed for European coordination, stating that the situation requires bold and joint solutions rather than general exhortations. Mitsotakis formally submitted a proposal to Brussels and sent letters to the President of the European Commission and the President of the Eurogroup requesting additional budgetary flexibility for member states.

Supporting the economy without undermining the resilience of the economy is the government's choice.

Greece rolls out domestic fuel subsidies

During a cabinet meeting in Athens on Wednesday, Mitsotakis announced four targeted domestic measures to counter elevated consumer costs, pointing to the economic consequences of hostilities in the Middle East. Under the fuel relief plan, the Greek government increased the direct state subsidy on diesel at the pump from 10 cents to 15 cents per litre. With domestic refineries providing complementary discounts, total price relief for consumers at fuel stations will reach 20 cents per litre during the first half of October.

The Greek government also set a ceiling on heating oil prices, pledging to keep costs below €1.75 per litre under a framework to be announced before 15 October. Mitsotakis stated that all domestic relief measures will undergo continuous monitoring and will be reviewed every two weeks as global conditions change.

We do not need another national crisis amid a global crisis.

Debt restructuring and loan servicer penalties

To assist households and businesses facing broader financial pressures, the Greek government expanded state debt relief terms and instituted strict enforcement rules for private loan management firms. Athens increased the maximum duration of its national debt repayment scheme from 72 instalments to 120 instalments, while setting a minimum monthly payment threshold of €30.

The Greek cabinet also introduced binding protections to shield borrowers who meet their agreed payment schedules from foreclosure proceedings or asset seizures by loan servicers. Under the enforcement framework, any foreclosure action launched in breach of an agreed settlement is automatically cancelled. Offending servicers face regulatory fines of up to €500,000, and affected borrowers receive a credit of five monthly instalments under their original settlement plan.

Any broader initiative must have a European stamp. Greece is submitting a proposal to Brussels so that member states can be granted extra flexibility in response to the current crisis.