Govt to continue financial consolidation with storm clouds ahead - Giorgetti

(ANSA) - ROME, 13 OTT - Economy Minister Giancarlo Giorgetti said the government will continue to take a prudent approach to managing the public finances as there are storm clouds ahead as he presented its Public Finance Planning Document (DPFP) in the Lower House on Tuesday. The DPFP features the government's plan to use the escape clause granted by the EU for 0.3% budget deviations for both energy and defence investments in the 2027 budget law. "Planning three years ahead (in the DPFP) is highly complex especially amid great turbulence, and updates come weekly, as IMF data show," Giorgetti said. "The fundamental premise underlying our reasoning is that when the weather forecast predicts a storm, it is wise to check the vessel's condition before heading out to the open sea, and that is precisely what we have sought to do in recent years. "We believe it is essential to stay on this course at a time when storm clouds are gathering on the horizon. "This document is a reflection of that approach, aiming to adhere to the path of fiscal consolidation and meet the targets set by the new European governance framework, with a view to exiting the (excessive-deficit) procedure in the spring, conditions permitting". Italy's budget deficit needs to come within the 3% of GDP threshold for it to be able to emerge from the procedure. Giorgetti has said he is expects this to be the case for 2026, after the deficit came in at 3.1% for 2025, before going up to 3.4% in 2027 with the use of the escape clause. "The request to adjust the budget in order to activate the national escape clause for defence and energy is a deliberate departure from the prudent stance I have previously advocated," Giorgetti said. "These are measures that the Commission acknowledges, and that the markets have deemed sustainable within the framework of ensuring the long-term sustainability of Italian public debt". (see related story on the IMF). (ANSA).
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