Italy, pressed to lower deficit but hike defense spending, lashes at ‘stupid' EU rules
ROME: European Union budget rules are 'stupid and senseless' and need to be changed to allow member states to boost defense spending as recommended by Brussels, Italian Economy Minister Giancarlo Giorgetti said on Thursday.
The EU Commission has introduced flexibility clauses to allow more investment in security, but Giorgetti said their current form penalizes countries such as Italy, which are under a so-called EU infringement procedure for their excessive deficits.
'It is essential to find ways to bring these rules up to date with the crisis we are experiencing so that they do not seem stupid and senseless,' the minister said in a statement issued by his staff on the sidelines of a meeting with euro zone peers in Luxembourg.
The title of the statement was blunter, saying Giorgetti called for changes to 'stupid and senseless rules.'
Brussels has proposed allowing member states to raise defense spending by 1.5 percent of gross domestic product each year for four years without any disciplinary steps that would normally kick in once a deficit is more than 3 percent of GDP.
The plan came amid growing pressure in Europe to boost military spending to deter a potential attack from Russia and become less dependent on the United States.
Highly-indebted Italy is set this year to meet the NATO defense target of 2 percent of GDP through a series of accounting changes, but an alliance summit next week is expected to raise the goal to 5 percent of GDP.
Giorgetti said that, under the Commission's scheme, member states not subject to the EU's excessive deficit procedure would be allowed to use the extra leeway on defense without breaching budget rules, even if their deficits rise above the 3 percent of GDP ceiling.
However, 'member states already in the infringement procedure cannot use the same flexibility,' he added.
In this situation Italy is reluctant to use the EU flexibility clause because it would prevent it from lowering its deficit to 2.8 percent of GDP in 2026 from 3.4 percent last year, as planned.
'Italy is committed to a timely exit from the infringement procedure and accepting the invitation to increase defense spending would forever prevent this,' Giorgetti said.
Rome is also wary of any move that could harm its improving reputation on financial markets, two government officials said.
Last month, credit ratings agency Moody's upgraded Italy's outlook to 'positive' after rival S&P Global raised the country's rating to 'BBB+' from 'BBB.'
Italy's preferred option would be the issuance of common EU debt to finance higher defense spending, one of the officials said, but such a plan would require support from the other bloc members. (Editing by Alvise Armellini and Gavin Jones)
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Asharq Al-Awsat
2 hours ago
- Asharq Al-Awsat
EIB to Allot 70 Bln Euros for Tech Sector in 2025-2027
The European Investment Bank is likely to announce on Friday plans to pump 70 billion euros into the development of European technology firms over the next three years, EU officials said. The program, called Tech EU, is meant to help Europe compete with China and the United States in the race for innovative clean and digital technologies. The EIB, the biggest multilateral lender in the world with a balance sheet total of 556 billion euros, expects its own 70 bln euros to mobilize a further 250 billion euros of private cash as investors crowd into projects supported by the EIB, Reuters quoted EU officials as saying. The 70 billion is to be split into 20 billion euros for equity and quasi-equity, 40 billion euros for loans and 10 billion for guarantees in 2025-2027, the officials said. The plan is to complement European Commission efforts to support higher risk ventures and innovative companies throughout their investment journey, from proof of concept to an initial public offering. The EIB wants to focus on supercomputing, artificial intelligence, digital infrastructure, critical raw materials, green industries such as offshore wind, health, security and defense technologies, robotics and advanced materials, the officials said.
Al Arabiya
5 hours ago
- Al Arabiya
British FM says ‘window now exists' for diplomacy with Iran
On the eve of European talks with Iran over its nuclear program, Britain's Foreign Secretary David Lammy said Thursday after meeting high-level US officials that there is still time to reach a diplomatic solution with Tehran. Lammy met with US Secretary of State Marco Rubio and special envoy Steve Witkoff at the White House, before talks on Friday in Geneva with Iranian Foreign Minister Abbas Araghchi alongside his French, German and EU counterparts. The diplomatic flurry came as European countries call for de-escalation in the face of Israel's bombing campaign against Iran's nuclear program – and as US President Donald Trump weighs up whether or not to join the strikes against Tehran. 'The situation in the Middle East remains perilous,' Lammy said in a statement released by the UK embassy in Washington. 'We discussed how Iran must make a deal to avoid a deepening conflict. A window now exists within the next two weeks to achieve a diplomatic solution,' Lammy said. 'Tomorrow, I will be heading to Geneva to meet with the Iranian foreign minister alongside my French, German and EU counterparts,' the British minister said. 'Now is the time to put a stop to the grave scenes in the Middle East and prevent a regional escalation that would benefit no one.' The State Department said Lammy and Rubio had 'agreed Iran can never develop or acquire a nuclear weapon.' Araghchi earlier confirmed he would 'meet with the European delegation in Geneva on Friday,' in a statement carried by Iranian state news agency IRNA. The talks are set to include Lammy, French Foreign Minister Jean-Noel Barrot and German Foreign Minister Johann Wadephul, as well as EU foreign policy chief Kaja Kallas. Trump has said he is weighing military action against Iran's nuclear facilities as Israel pummels the country and Tehran responds with missile fire. France, Germany, Britain and the European Union were all signatories of the 2015 nuclear agreement with Iran, which Trump sank during his first term in office. The EU's Kallas, in coordination with European countries, has insisted that diplomacy remains the best path toward ensuring that Iran does not develop a nuclear bomb. On Wednesday, French President Emmanuel Macron said European nations were planning to suggest a negotiated solution to end the Iran–Israel conflict. He asked his foreign minister to draw up an initiative with 'close partners' to that end. Barrot has been in regular touch with his German and British counterparts since Israel launched massive air strikes against Iran on Friday. 'We are ready to take part in negotiations aimed at obtaining from Iran a lasting rollback of its nuclear and ballistic missile programs,' Barrot said. Israel says its air campaign is aimed at preventing Iran from acquiring nuclear weapons. Iran had been enriching uranium to 60 percent – far above the 3.67 percent limit set by a 2015 deal with international powers, but still short of the 90 percent threshold needed for a nuclear warhead. Iran denies it is building nuclear weapons.
Arab News
8 hours ago
- Arab News
Italy, pressed to lower deficit but hike defense spending, lashes at ‘stupid' EU rules
ROME: European Union budget rules are 'stupid and senseless' and need to be changed to allow member states to boost defense spending as recommended by Brussels, Italian Economy Minister Giancarlo Giorgetti said on Thursday. The EU Commission has introduced flexibility clauses to allow more investment in security, but Giorgetti said their current form penalizes countries such as Italy, which are under a so-called EU infringement procedure for their excessive deficits. 'It is essential to find ways to bring these rules up to date with the crisis we are experiencing so that they do not seem stupid and senseless,' the minister said in a statement issued by his staff on the sidelines of a meeting with euro zone peers in Luxembourg. The title of the statement was blunter, saying Giorgetti called for changes to 'stupid and senseless rules.' Brussels has proposed allowing member states to raise defense spending by 1.5 percent of gross domestic product each year for four years without any disciplinary steps that would normally kick in once a deficit is more than 3 percent of GDP. The plan came amid growing pressure in Europe to boost military spending to deter a potential attack from Russia and become less dependent on the United States. Highly-indebted Italy is set this year to meet the NATO defense target of 2 percent of GDP through a series of accounting changes, but an alliance summit next week is expected to raise the goal to 5 percent of GDP. Giorgetti said that, under the Commission's scheme, member states not subject to the EU's excessive deficit procedure would be allowed to use the extra leeway on defense without breaching budget rules, even if their deficits rise above the 3 percent of GDP ceiling. However, 'member states already in the infringement procedure cannot use the same flexibility,' he added. In this situation Italy is reluctant to use the EU flexibility clause because it would prevent it from lowering its deficit to 2.8 percent of GDP in 2026 from 3.4 percent last year, as planned. 'Italy is committed to a timely exit from the infringement procedure and accepting the invitation to increase defense spending would forever prevent this,' Giorgetti said. Rome is also wary of any move that could harm its improving reputation on financial markets, two government officials said. Last month, credit ratings agency Moody's upgraded Italy's outlook to 'positive' after rival S&P Global raised the country's rating to 'BBB+' from 'BBB.' Italy's preferred option would be the issuance of common EU debt to finance higher defense spending, one of the officials said, but such a plan would require support from the other bloc members. (Editing by Alvise Armellini and Gavin Jones)
