BRUSSELS — Italy's government has failed to rein in its public spending enough to shake off EU fiscal oversight in a blow to Prime Minister Giorgia Meloni ahead of next year's general election. The Italian National Institute of Statistics today confirmed that the gap between the country’s public expenditure and revenues last year was 3.1%, above the EU's budget deficit cap of 3% under the bloc's rules for public spending. The deficit breach keeps it in the European Commission's "excessive deficit procedure," a red flag that Brussels slaps on governments that need to improve the health of their public finances.
Italy's been subject to the EDP and, as a result, the Commission's fiscal oversight since 2024, forcing Rome to pursue stricter caps to bring its spending under control. The figures come as a disappointment to Meloni's government ahead of the country going to the polls in 2027. The state of the economy will be top of voters' minds as Rome continues to struggle to contain energy and debt costs amid the ongoing war in the Middle East, and opposition parties argue that Meloni's failure to meet the deficit target is a direct result of her government's economic policy based on austerity and a lack of strategy for growth.
Next year, the country’s economy is expected to grow by 0.6% — the lowest rate in the entire European Union — while its debt is set to exceed Greece's, reaching 139% of gross domestic product.
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