Italy’s Economy Minister Giancarlo Giorgetti has called for urgent changes to European Union budget rules, branding them “stupid and senseless” during talks with eurozone counterparts in Luxembourg on Thursday.
His remarks come as the EU pushes member states to raise defence spending in response to growing security concerns, particularly relating to Russia. However, Giorgetti warned that current budget frameworks penalise heavily indebted countries like Italy, making it harder for them to follow Brussels’ own recommendations.
“It is essential to find ways to bring these rules up to date with the crisis we are experiencing so that they do not seem stupid and senseless,” Giorgetti said in a statement. The official title of the document was more direct, explicitly referring to “stupid and senseless rules.”
The European Commission has proposed allowing member states to increase defence spending by 1.5% of GDP annually for four years, even if that raises national deficits above the usual 3% of GDP ceiling. But this flexibility is only available to countries not already under an excessive deficit procedure — a key point of contention for Italy.
Italy looking to exit deficit procedure
Italy, which had a deficit of 3.4% in 2023, is currently under such a procedure and is aiming to reduce its deficit to 2.8% by 2026. Giorgetti argued that using the Commission’s flexibility clause would permanently derail this objective.
“Italy is committed to a timely exit from the infringement procedure, and accepting the invitation to increase defence spending would forever prevent this,” he said.
Despite meeting the NATO defence target of 2% of GDP this year through accounting adjustments, Italy may face pressure to raise spending further. A NATO summit next week is expected to propose an increase to 5% of GDP.
Rome is also treading carefully to protect its recently improved standing in financial markets. Credit ratings agency Moody’s upgraded Italy’s outlook to “positive” last month, following an earlier ratings boost by S&P Global.
According to government officials, Italy’s preferred solution would be the issuance of common EU debt to fund increased defence budgets across the bloc — a plan that would require backing from other member states.
As the EU seeks to strengthen its military capacity, Italy is demanding budget rules that reflect today’s geopolitical realities — and allow all member states to contribute without compromising fiscal credibility.
