Rome – In a push for more realistic fiscal oversight, Italy’s Economy Minister Giancarlo Giorgetti told euro‑zone finance ministers that the European Union should consider the impact of rising inflation when evaluating member‑state budget compliance.

Inflation outpaces original assumptions

Giorgetti noted that Italy had based its spending targets on an assumed annual inflation rate of 1.8%. However, inflation surged to 4.1% in September, up from 3.2% the month before, dramatically altering the fiscal landscape.

Call for rule flexibility

“We are not questioning the budget rules, but we are asking that the rules be adapted to today’s reality,” Giorgetti said, emphasizing that higher prices can significantly affect government fiscal plans.

He warned that the burden of energy costs alone could shave at least 0.2% off next year’s GDP growth, underscoring the need for the EU Commission to weigh such external shocks when deciding whether to open or intensify infringement procedures against member states that miss agreed‑upon spending goals.

Upcoming budget approval

Italy is set to approve its 2027 budget next week, a plan that will reflect the higher inflation assumptions and the ministry’s request for greater flexibility under the EU’s fiscal framework.

Giorgetti said he will raise the issue of increased budget flexibility at this week’s meeting of euro‑zone finance ministers, urging the bloc to incorporate “relevant factors that in some way influence today’s environment” into its assessment criteria.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.