The European Commission rejected on Thursday the requests from Italy and Greece to grant eurozone governments greater fiscal leeway in light of the high inflation caused by energy prices and the support measures adopted to mitigate its impact, warning that the rules cannot be continuously modified.
The Italian Prime Minister, Giorgia Meloni, asked the European Commission to take into account inflation higher than expected when calculating the authorised budget deficits and assessing spending deviations.
Rome argued that the European Union should allow member states to use extraordinary tax revenues generated by inflation to help counteract the sharp increase in energy costs.
For his part, the Greek Prime Minister, Kyriakos Mitsotakis, urged the Commission to exclude temporary measures of national support for households and businesses from the maximum net primary spending limit set by the European Union.
'Upward inflationary pressures are already taken into account in the overall assessment of the relevant factors when examining member states' compliance with fiscal rules. We cannot propose new fiscal flexibilities at all times,' said the European Commissioner for Economy, Valdis Dombrovskis, at a press conference.
'In fact, this could raise doubts about our collective determination to uphold a rules-based fiscal framework, at a time when the credibility of our commitment to budgetary sustainability is a fundamental asset,' he added.
The Commission has already granted some leeway to EU countries in their agreed fiscal consolidation paths to absorb increased defence spending and measures aimed at reducing dependence on fossil fuels.
