Italian government eyes EU deficit exit to free fiscal space before 2027 vote

On 22 September, Istat will publish updated public-finance figures that will indicate if Italy’s 2025 deficit remained below the 3% of GDP limit that triggers the EU excess-deficit procedure. The final assessment will be. If the threshold is met, the government plans to use the resulting flexibility on energy and defence projects to fund measures aimed at the middle class and to strengthen its electoral appeal before the 2027 polls.

Prime Minister Giorgia Meloni and Economy Minister Giancarlo Giorgetti argue that such fiscal breathing room could be decisive for their re-election strategy. The approach relies on shifting certain budget items into a European-approved flexibility pool, preserving the primary-spending ceiling and keeping the overall deficit impact neutral. Success would also enable Italy to activate a national safeguard clause that supports innovative investments while remaining compliant with EU rules.