Italian PM asks EU to loosen fiscal rules for energy

Italy's Prime Minister Giorgia Meloni has asked the EU to loosen fiscal rules to help member states manage higher energy prices sparked by the Middle East war, according to a letter obtained by AFP.

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In the letter to EU chief Ursula von der Leyen, Meloni said that "investments and extraordinary measures needed to address the energy crisis" should be exempted from the EU's Stability and Growth Pact.

"The Middle East crisis and the tensions in the Strait of Hormuz... are already having a very serious and often asymmetrical effect on energy prices," Meloni wrote.

She asked for the exception made by the EU for defence spending, which are not included in a member state's deficit calculations, to be extended to measures that limit the impact of higher energy prices.

"In Italy and many European nations there is growing concern about having to confront a new economic and social shock," Meloni wrote.

"We should have the political courage to recognise that today energy security is also a European strategic priority," she said.

Shipping through the Strait of Hormuz, which accounted for a fifth of the world's oil supply before the US and Israel launched attacks on Iran in February, has been heavily restricted since the outbreak of the Middle East war.

Italy is highly dependent on energy imports and is one of the EU countries most exposed to higher prices.

A spokesman for von der Leyen did not comment when asked about Meloni's letter, but highlighted EU measures taken thus far to help member states address the energy crisis. 

"The focus at this stage is on making a full use of the very significant EU funding already available," said Balazs Ujvari during a press conference in Brussels.

He cited the 300 billion already made available for energy investments, "with approximately 95 billion still to be used", he said, adding that the EU was trying to "mobilise private investment". 

Since the outbreak of the war, Meloni has redoubled efforts to increase energy supplies from other countries such as Algeria and Azerbaijan.

Italy has also slashed excise duties on fuel to try to limit increases in petrol and diesel prices.

Italy last month trimmed its 2026 and 2027 growth forecasts to 0.6 percent and confirmed that its public deficit was still above the European Union's threshold of three percent of GDP.

Italy has said the deficit was 3.1 percent last year but is expected to fall to 2.9 percent in 2026.