ROME, April 9 (Reuters) – European Union authorities should consider a temporary suspension of budget deficit rules if the U.S.-Israeli war against Iran flares up again, Prime Minister Giorgia Meloni told parliament on Thursday.
Meloni also said her government was ready to take every possible measure to prevent potential speculative behaviour on energy prices, including introducing windfall taxes on energy companies.
“We believe that discussing a possible temporary suspension of the Stability and Growth Pact should not be taboo. Not a waiver for individual Member States, but a general measure,” Meloni said.
Her remarks come as the government is preparing to cut its GDP growth estimates for 2026 and following years later this month, making it more difficult for Italy to bring its deficit below the EU’s 3% of GDP ceiling this year, as planned.
The EU activated between 2020 and 2023 a so-called ‘general escape clause’ to suspend budget rules and allow member states to respond to the COVID-19 pandemic, which had triggered lockdowns and economic downturns in EU countries and the closure of Europe’s borders.
That clause, however, can be tapped in the event of a severe economic downturn in the euro area or the EU as a whole, something which is not currently expected by leading forecasters.
Italy could also activate a national escape clause allowing member states to deviate from budget goals agreed with the EU in response to exceptional circumstances outside their control. The government has so far ruled out doing so as long as Rome is under excessive deficit procedure.
“Italy remains ready to take every possible measure to prevent potential speculative behaviour (on energy prices), including, if necessary, further action regarding the profits of energy companies,” Meloni added.
Meloni and her predecessor Mario Draghi adopted in recent years windfall taxes on the energy sector, triggering legal disputes with affected companies.
(Reporting by Angelo Amante and Giuseppe Fonte; Editing by Alvise Armellini and Kim Coghill)
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