European Commission Rejects Italy and Greece Fiscal Flexibility Requests

The European Commission rejected requests from Italy and Greece for increased fiscal flexibility intended to mitigate the impact of high energy prices and inflation. Italian Prime Minister Giorgia Meloni asked the Commission to factor higher-than-expected inflation into budget deficit calculations and allow member states to use inflation-driven tax revenues to offset energy costs. Simultaneously, Greek Prime Minister Kyriakos Mitsotakis sought exemptions from the EU's maximum net expenditure limit for temporary national support measures targeting businesses and households.

European Economic Commissioner Valdis Dombrovskis denied both requests, arguing that the EU cannot introduce new flexibilities constantly. He stated that such moves would undermine the credibility of the rules-based fiscal framework and the collective commitment to fiscal sustainability. The Commission noted that it has already provided leeway for fossil fuel independence measures and defense spending.