The European Commission says it is actively examining Italy’s request to extend Stability Pact flexibility to energy crisis spending. However, the signals from Brussels remain cautious, and the frugal bloc’s resistance has not softened. Meanwhile, Giorgetti is looking at alternatives to the escape clause.
Italy’s push to win fiscal breathing room for energy crisis spending has secured a meaningful, if carefully worded, concession from Brussels. European Commission Economy Vice-President Valdis Dombrovskis told reporters at the close of the G7 Finance Ministers’ on Tuesday that the Commission is formally examining Italy’s request to extend the National Escape Clause — currently available for defence spending — to cover measures aimed at cushioning the impact of the energy-price shock triggered by the war in Iran.
“In the EU Commission, we continue to closely monitor the situation and assess what type of response it requires and will require,” Dombrovskis said. “And it is in this spirit that we are also examining Italy’s request.”
The statement marks a rhetorical step forward from the Commission’s earlier, more dismissive posture. In April, Dombrovskis had told the European Parliament’s Committee on Economic Affairs that the Stability Pact would not be suspended, saying “to suspend the pact, there must be a serious economic crisis in the eurozone or the EU as a whole, and we are not in that situation.” Saying the Commission is now “examining” Italy’s request is not the same as saying yes — but it is no longer saying no.
The Commission’s conditions
Dombrovskis was at pains to set out the Commission’s preferred policy framework, which diverges in important ways from what Italy is seeking. “Our policy orientation is to adopt temporary and targeted measures to support the economy, which do not increase demand for fossil fuels,” he said. “The problem we are facing is a supply-side shock. If many countries support the demand side, we end up keeping energy prices high and spending a lot of money with limited results.” He added that the Commission’s approach was aligned with IMF advice — a signal that Rome should not expect an open-ended fiscal green light even if some flexibility is extended.
The Commission’s position, in essence, is that it may accept targeted energy relief measures within or alongside existing fiscal rules, but that it does not favour a broad suspension of the Pact. Dombrovskis has made clear that the general escape clause remains firmly closed unless Europe tumbles into severe recession — and the Commission’s scenario analyses point to a slowdown, not a slump.
Giorgetti: “Many ways to get to the result”
Italy’s Economy Minister Giancarlo Giorgetti, also present in Paris for the G7 meeting, signalled that Rome is not wedded to any single mechanism — a pragmatic shift that may help bridge the gap with Brussels. “There’s not just the exemption, there are many ways to get to the result; we’re exploring them all,” he told reporters. “We’re working on it. It’s a complex matter. I believe no one has prejudices; there’s an awareness that the situation is exceptional. There are various forms, various methods, various possibilities.”
Giorgetti and Dombrovskis had already met earlier this month on the sidelines of a Eurogroup meeting to discuss the matter. At that time, Dombrovskis reiterated that the Commission’s advice was to stick with “targeted temporary measures with a limited fiscal impact.”
The path forward remains politically treacherous. Italy and Spain have been the most vocal in pushing for fiscal flexibility to address the energy crisis, while the Netherlands’ Finance Minister Eelco Heinen has been blunt in his opposition: “It cannot be that every time there is a shock, the response is more debt.” Belgium has also said it does not see the conditions for triggering the suspension clause.
France and Greece have taken a different approach from Italy entirely, pressing for new joint European debt rather than an extension of existing national flexibility.
