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Meloni's EU Reprieve Hopes Dashed as Italy's Deficit Remains at 3.1%
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Moneycontrol•22-09-2026, 15:31
Meloni's EU Reprieve Hopes Dashed as Italy's Deficit Remains at 3.1%
- •Italy's 2023 deficit confirmed at 3.1% by Istat, exceeding the EU's 3% ceiling and disappointing Prime Minister Giorgia Meloni's government.
- •The higher deficit means Italy will not exit the EU's Excessive Deficit Procedure (EDP) as hoped, potentially delaying it until 2027.
- •Despite a slight upward revision of growth to 0.6%, it wasn't enough to reduce the budget shortfall.
- •The news adds pressure on Meloni, who faces national elections next year and aims to increase spending while cutting taxes and protecting citizens from global uncertainty.
- •Finance Minister Giancarlo Giorgetti will now focus on preparing the final budget of Meloni's premiership for EU and Italian parliamentary approval by mid-October.
Key Questions Answered
Italy's deficit for last year was confirmed at 3.1% by the country's statistics office, remaining above the European Union's 3% ceiling and postponing the nation's exit from the Excessive Deficit Procedure.
Finance Minister Giancarlo Giorgetti stated that Italy's early exit from the Excessive Deficit Procedure will not happen this year as hoped, but it may occur in 2027.
Investors have rewarded the Meloni government's stability and low deficit by narrowing the spread between Italian and comparable German 10-year bonds to below 90 basis points, down from over 200 basis points in 2022.
