Giorgia Meloni asks EU for budget flexibility as energy costs push up inflation

Request for fiscal flexibility

Italian Prime Minister Giorgia Meloni announced on Wednesday that she sent a letter to European Commission President Ursula von der Leyen requesting greater budget flexibility. Speaking via video link at the second edition of the "Oltre le Radici" conference organized by the newspaper Il Gazzettino, Meloni called on European Union authorities to account for elevated inflation when calculating deficit limits and fiscal rules. She argued that rising consumer prices, driven by high global energy costs, require adjustments to fiscal compliance targets across member states. The Italian government previously presented this position during discussions at the Economic and Financial Affairs Council (Ecofin). Meloni stated that multiple other European Union member countries share this approach and are preparing similar requests for budget relief.

We have already raised the need within Ecofin to factor the current high inflation into the calculation of the European parameters that must be met and the permitted deficit levels. Other member states are moving in the same direction. And I intend to take further action with the EU Commission. I am writing to President von der Leyen to ensure this issue is addressed at next week's Ecofin meeting and subsequently at the next EU Council meeting in two weeks: we believe that in light of the inflation driven by soaring global energy costs, it is necessary to grant member states additional flexibility to support families and businesses.

Timetable for European negotiations

Meloni outlined a schedule for addressing fiscal parameters in upcoming European Union forums. The Italian government wants the topic formally placed on the agenda for the Ecofin ministerial meeting scheduled for next week. Following the ministerial discussions, the Italian delegation plans to raise the request during the European Council summit of heads of state and government two weeks later. Meloni explained that additional leeway on deficit targets is necessary to allow national governments to allocate funding directly to households and corporate sectors coping with high utility bills. Italian officials intend to coordinate with allied member states before the Brussels meetings take place.

Domestic budget strategy

Addressing domestic fiscal policy, Meloni previewed the upcoming Italian budget law and confirmed that her cabinet will maintain its existing economic framework. The prime minister explained that the administration continues to operate under constrained public finances, having inherited what she described as a difficult budgetary situation. Meloni noted that available government resources will remain focused on targeted priorities rather than broad spending initiatives. The national strategy concentrates funding on supporting wages, protecting purchasing power, providing assistance to businesses, supporting families, offering birth rate incentives, and funding healthcare. Meloni recalled that earlier executive actions used available state revenue to implement tax reductions on corporate operations and labor.

What I can state for certain is that we will continue in the direction we have taken so far, because we have always followed the same logic in these years: adding, year after year, one more piece to the same strategy.

Governance and artificial intelligence

During the conference address, Meloni also commented on the expansion of artificial intelligence and the challenges it creates for policymakers. She stated that technological developments in the artificial intelligence sector are advancing faster than political institutions and existing legal frameworks. The prime minister expressed concern that regulatory systems risk lagging behind rapid technological changes in the private sector. Meloni stressed that international discussions regarding technology policy currently overlook the fundamental question of accountability for automated systems.

The real issue, which it seems to me is not being adequately addressed in the approach to artificial intelligence, is the issue of responsibility.