EU exec rejects Greek, Italian requests for more fiscal rules flexibility

The European Commission pushed back ​on Thursday against Italian ​and Greek requests to grant ‌euro zone ​governments more fiscal leeway related to higher inflation caused by energy prices and support measures ‌to cushion them, saying rules could not be changed all the time. Italian Prime Minister Giorgia Meloni asked the European Commission to factor higher-than-expected inflation ‌into calculations for permitted budget deficits and when evaluating spending deviations.

Rome argued ‌that the EU should let member states utilize extra tax revenues generated by inflation to help counter soaring energy costs. Greek Prime Minister Kyriakos Mitsotakis urged the Commission to ⁠exempt ​temporary national support ⁠measures for households and businesses from the EU's maximum net expenditure limit.

"Upward inflation pressures are ⁠already considered as part of an overall assessment of relevant factors when assessing Member States' ​compliance with fiscal rules. We cannot come with new fiscal flexibilities ⁠all the time," European Economic Commissioner Valdis Dombrovskis told a news conference. "In fact, ⁠this ​could cast doubt on our collective resolve to uphold the rules-based fiscal framework at a time when the credibility of our commitment ⁠to fiscal sustainability is a vital asset," he said.

The Commission has already ⁠granted EU countries ⁠leeway in their agreed fiscal consolidation paths to account for higher defence spending and measures to become less ‌reliant on ‌fossil fuels.