The European Commission is preparing an extension of the national escape clause of the Stability Pact. The move would pave the way for greater flexibility for energy transition investments.
Among the measures that may be included are incentives for the purchase of electric cars and contributions for the installation of heat pumps, with the aim of supporting decarbonisation without burdening the public finances of the Member States.
Stability Pact, new from the European Commission
The indication emerges from a note that the European executive will present to the Economic and Financial Committee. This is an evolution of the safeguard clause initially introduced to allow the countries of the Union to exclude part of the expenditure dedicated to defense from the constraints of the Stability Pact.
Italy was among the states that supported with greatest conviction the extension of the mechanism also to investments linked to the energy transition.
Which incentives can be financed
The documentation prepared by the Commission identifies the categories of intervention that will benefit from greater flexibility, without defining the individual national programs in detail.
The measures considered include:
- incentives for the renewal of company car fleets with electric vehicles;
- contributions for the replacement of commercial vehicles with electric vehicles;
- help for the purchase and installation of heat pumps in offices, laboratories and production plants.
How the procedure will work
The expansion of the clause will not require a new green light from Ecofin, which had already approved the original mechanism valid for investments of up to 1.5% of GDP over four years.
For this reason, the topic will not be included in the agenda of the meeting of European Union economic ministers scheduled for 10 July.
The next step, as mentioned, will be the examination of the proposal by the Economic and Financial Committee and subsequently each government will have to submit a request to the European Commission indicating the investments it intends to finance through the clause. Then it will be up to Ecofin to formally authorize the activation of the mechanism for each country.
The first applications could arrive in September, while authorizations are expected from October.
The limits set by the Stability Pact
The clause intended for defense spending came into force in 2025 and can be used until 2028, allowing investments equal to a total of 1.5% of GDP over four years to be excluded from the budget constraints.
For interventions aimed at the energy transition, the expected margin would instead be equal to 0.6% of GDP in the period between 2026 and 2028, with a maximum limit of 0.3% of GDP for each year.
The positions of the European countries
The countries that are traditionally more rigorous in controlling public finances have expressed doubts about the possibility of further expanding the flexibility provided for by the Stability Pact.
Even the Baltic states and those most exposed on the Union’s eastern front have shown limited interest, preferring to concentrate available resources on strengthening defense.
What changes for Italy
For Italy, the extension of the clause could translate into the possibility of financing new incentives for electric mobility and energy efficiency with greater flexibility compared to the constraints of the Stability Pact.
