EU Unlikely to Approve New Fiscal Rules This Year, Says Italy Minister – Reuters

ROME (Reuters) – Italian Economy Minister Giancarlo Giorgetti stated on Monday that the European Union is unlikely to reach an agreement on new fiscal rules by the year-end deadline.

The Stability and Growth Pact, which sets the EU’s fiscal framework, has been on hold since 2020 to assist governments in navigating the economic challenges posed by the COVID-19 pandemic and the subsequent Russian invasion of Ukraine in February 2022, which led to soaring energy and food prices.

The rules are expected to be reinstated in 2024, and the EU is racing to create a new set of regulations that can gain approval from all member states. Italy is advocating for a more flexible approach compared to some northern European countries.

Giorgetti indicated that an agreement before the end of the year seems improbable, a sentiment that the European Commission is beginning to acknowledge. He mentioned that the EU executive had prepared "a sort of guidance in the event that we don’t manage to approve a new Pact by the end of the year, which is perhaps the most likely outcome."

Italy is also facing a challenging 2024 budget scenario, as the government aims to balance Prime Minister Giorgia Meloni’s tax-cutting pledges while reducing the deficit amid an economic slowdown.

Meloni called on ministers on Monday to "avoid waste" as they submit their requests before the budget is presented to parliament in October. Giorgetti acknowledged the difficulties ahead but reaffirmed the government’s commitment to meet its targets regarding deficit and debt reduction.