The suspension of European budget constraints could free up almost 28 billion euros. An additional fiscal space that would allow Italy to breathe in the face of the energy crisis. These are the numbers that emerged from the analysis of the Unimpresa study centre, published before the approval of the 2026 Economic and Financial Document. In this, a deficit of 3.1% was confirmed, a percentage that takes us far from exiting the infringement procedure, as hoped by Economy Minister Giorgetti.
From the point of view of dialogue between the parties, Giorgia Meloni and Giancarlo Giorgetti have proposed a temporary suspension of the general safeguard clause in the event of a worsening of the crisis in the Middle East, but a “no” comes from Brussels because the conditions are not there and for now the line is to continue with the constraints.
Stability Pact, what it is and what is needed to suspend it
But what is the Stability Pact? This is the set of European rules to keep public finances under control. It follows the rule of the deficit-GDP ratio, but compared to when it was first set in 1997 it is now more flexible. Countries can in fact negotiate a 4 to 7 year recovery plan in exchange for reforms and investments for growth.
Italy is in proceedings for excessive deficit, but today a suspension is being requested due to the geopolitical situation which is altering the economy in a way beyond the countries’ ability to control. At least this is what Italy proposes. In fact, there is a general escape clause that blocks the constraints in the event of a shock and the Meloni government is asking for precisely this.
From Brussels, however, comes the no, because there would not yet be a general recession.
The suspension of the Pact: the scenarios
But why do we want to suspend the Stability Pact? The Pact limits how much a government can run a deficit without facing sanctions. In case of suspension, figures capable of supporting the current crisis would be freed up.
According to the analyzes of Unimpresa:
- in the most prudent scenario, with a deficit of 3%, the additional margin for the public budget would be around 4.6 billion euros;
- in an intermediate scenario, with a return of the deficit to 3.4% of GDP, the available resources would rise to around 13.9 billion euros;
- in the expansionary hypothesis, the deficit at 4% of GDP could create fiscal space of around 27.9 billion euros.
Why Europe says “no”
For the European Union, however, the suspension of the Stability Pact is not among the feasible scenarios at the moment. This is because it would require recognition of a severe and widespread economic shock, just as happened during the pandemic.
Paolo Longobardi, president of Unimpresa, commented:
Europe has demonstrated, in the darkest moment of the pandemic, that it knows how to put aside bureaucratic rigidities to respond with tools that are worthy of the crisis. Today, faced with a geopolitical and energy shock that risks hitting our businesses and families hard, that same Europe is called to give a similar signal of maturity and cohesion.
The proposal is to go in this direction, so as to guarantee states additional fiscal space to absorb the impact without sacrificing employment, investments and competitiveness.
The consequences of the scenarios
The analysis also includes the consequences of possible re-proposed scenarios. In the first case, the most prudent one, the suspension of the constraints would allow Italy to add a margin to the budget of approximately 4.6 billion euros. A limited space but described as sufficient to finance a selective package of emergency measures, such as the extension of tax credits for energy-intensive businesses, social bonuses for low-income families and also the temporary reduction of system charges on bills or other targeted interventions for the road transport and logistics sector.
In the second scenario, with 13.9 billion euros, we could face a sort of “anti-shock maneuver”. A company imagines:
- the sterilization of energy increases;
- liquidity support for the most exposed companies;
- the financing of public credit guarantee instruments;
- temporary incentives for productive investments;
- the coverage of any measures to mitigate the inflationary impact on medium-low incomes.
The most expansive scenario, the one which envisages reaching a margin of 28 billion euros, could instead be comparable to a budget law, therefore sufficient not only for emergency measures but also for a vast anti-crisis strategy.
Thus, tax cuts, support programs for families and businesses, strengthening of public investments and safeguard measures for the industrial sectors most affected by the increase in energy costs and the slowdown in global trade are envisaged.
