Bank of Italy warns deficit may delay exit from EU procedure
Italy’s plan for a deficit above 3% of GDP in 2027 and 2028 could complicate its exit from the EU’s excessive deficit procedure, the bank said.
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what happened
Italy’s plan to keep its budget deficit above 3% of GDP in both 2027 and 2028 could complicate the country’s exit from the European Union’s excessive deficit procedure, the Bank of Italy said on Monday, according to Newsmetry API. Leaving the procedure is a longstanding objective of Economy Minister Giancarlo Giorgetti and would underscore Rome’s fiscal consolidation efforts.
Italy expects its deficit to fall to 3% of GDP in 2026, the first time since 2019, before rising to 3.4% in 2027 and then edging down to 3.2% in 2028. The increase reflects Brussels’ flexibility for higher defence spending and measures to cushion the impact of rising energy costs.
The Bank of Italy pointed to an asymmetry in the European framework: the national escape clause could prevent an excessive-deficit procedure from being opened if the limit is breached, but does not offer a comparable provision for leaving an existing procedure. The European Commission would still need to be convinced that Italy’s fiscal consolidation is durable. The central bank also urged close monitoring of year-end trends because the margin below the 3% threshold is narrow.
why it matters
The warning may keep attention on Italy’s fiscal credibility and the conditions for leaving the excessive deficit procedure. Investors will monitor the deficit path and the European Commission’s assessment.
instruments
sources
- Deficit above 3% of GDP could affect Italy's exit from EU budget procedure, central bank says — Newsmetry API, 12 October 2026 at 14:58 UTC
- Italy exit from EU budget procedure at risk due to deficit increase, central bank warns — Newsmetry API, 12 October 2026 at 15:59 UTC
prepared by the newsmetry newsroom with ai assistance from the sources listed below. not investment advice.
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