Italy wins EU approval to spend extra on defence and energy under national escape clause

The Council decision

The Economic and Financial Affairs Council, known as Ecofin, approved on Monday, 9 November, the activation of Italy's national escape clause (NEC) for spending on defence and energy. The clause lets Rome step away from agreed spending trajectories within set limits, which are up to 1.5% of GDP over a four-year period. The formal green light had been expected, and Italy will not use every margin the clause makes available. The government filed its request on 11 September, and the document approved by EU ministers says the extra spending will cover new multi-year investment programmes as well as higher current outlays, including military personnel and operating costs. Purchases financed through the European SAFE loan programme may also qualify for the extra room.

What the clause allows

The clause runs for four years and permits spending increases of up to 0.6% of GDP in each of 2027 and 2028, split evenly between 0.3% for defence and 0.3% for energy security. Giorgetti said the 2027 budget law contains provisions to use the flexibility for defence spending, up to a maximum of 0.3% of GDP for both years. He added that an additional margin of the same size is set aside each year for energy resilience. The government's request of 11 September indicated defence spending rising by up to 0.9 percentage points of GDP by the end of 2028, from the 1.3% recorded in 2024 and broadly flat through 2026. Defence flexibility may extend beyond 2028 for deliveries of equipment bought under contracts signed by that date, within the overall ceiling.

Defence, each of 2027 and 20280.3

Energy security, each of 2027 and 20280.3

Combined, each of 2027 and 20280.6

Defence, each of 2027 and 2028

0.3 % of GDP

Energy security, each of 2027 and 2028

0.3 % of GDP

Combined, each of 2027 and 2028

0.6 % of GDP

Data from the article text

Energy measures and conditions

The government has presented a first list of energy security interventions. It covers electrifying homes, improving efficiency in public and private buildings including schools, universities and health facilities, and installing solar panels. Other items include decarbonisation incentives, railways, public transport and sustainable urban mobility, plus more renewable generation, storage, grid flexibility and biofuels. Giorgetti said the measures primarily concern renewable energy production and storage, efficiency upgrades for public buildings, and sustainable mobility including local transport and rail. He stressed that the process will be demanding and that each measure will be checked closely.

“Implementation will be a crucial aspect: the Commission will need to assess, ex post, the actual expenditure incurred for each individual measure.”

The Commission will assess the eligibility of each energy measure and its impact on public accounts. Italy has committed to provide semi-annual updates on the measures for which it requests the flexibility.

Government reaction

Giorgetti welcomed the approval on Monday, saying the clause lets Italy strengthen defence capabilities and energy security while keeping to the recommended net expenditure path. He also claimed credit for pushing to include energy in the NEC, describing it as an Italian-led battle that other European countries may find useful. He said the government had held in-depth discussions with the Commission on the energy measures it intends to implement.

“We strongly and proudly assert our role in including energy within the NEC.”

Italy has not claimed the full margin available, and talks with Brussels on which energy measures will fall under the clause remain under way.