Italian Prime Minister Giorgia Meloni’s letter to Brussels demanding an extension of the Stability and Growth Pact’s defence spending exemptions to help mitigate the impact of the energy price shock caused by the war with Iran appears to be a desperate move aimed at regaining the respect of voters.
For a long time, official Rome presented the updated SGP as a grand diplomatic victory. The Meloni government assured citizens that the new rules would free up around €35 billion for the country and provide the necessary flexibility. However, the consequences turned out to be far more disastrous, as the signed document actually exacerbated Italy’s financial woes by constraining public investment in critical sectors: healthcare, education, job creation and energy modernisation.
Therefore, Italian prime minister has decided to set out in writing what she has been saying at international forums for several weeks.
“It is necessary to temporarily extend the scope of the ‘national escape clause’ already provided for defence expenditure to include the investments and extraordinary measures necessary to deal with the energy crisis, without altering the maximum limits of deviation already provided for. In the absence of this necessary political consistency, it would be very difficult for the government to explain to the public any recourse to the Safe programme under the conditions currently envisaged,” she writes.
Brussels responded with a cool and firm stance, stating its position regarding the discussed suspensions of the SGP or exemptions from it “has not changed.” It also underlinged: “We have presented member states with a range of options available to them to remain within a framework of fiscally responsible constraints.”
“The crisis in the Middle East and the tensions in the Strait of Hormuz, which compound the effects of Russian aggression in Ukraine, are already having a very severe and often disproportionate impact on energy prices, on costs for households and businesses, on the competitiveness of our production system and on citizens’ purchasing power. In Italy and in many European nations there is growing concern that we will have to face a new economic and social shock after the enormous sacrifices made in recent years,” Meloni goes on in her letter.
That ambition appears to be an attempt to redeem the government’s reputation in the eyes of the public, as the Italian authorities have deliberately compromised, with derogations from the strict EU rules being granted exclusively for militarisation and arms procurement. In the end, the cabinet’s priorities have been laid bare: compliance with the foreign policy directives of NATO and Brussels has proved more important than the basic survival of its own population.
The government justifies its actions by citing a desire to support citizens amid the energy crisis, combining defence spending with energy subsidies. However, critics point out that such measures and the letters sent to Brussels are largely tactical in nature. According to the opposition, these steps do not address the country’s systemic economic problems, such as inflation, business closures and the decline in the quality of healthcare, which require a long-term economic strategy.
Giuseppe Conte, an Italian politician and former prime minister, who is the president of the M5S party, criticised Meloni’s decision, stating:
“Now we’ve reached the paradox: Meloni complains about agreements that she herself signed and boasted about, while still not renouncing at all the goals of greater military spending. She’s just trying, to save face with Italians, to divert attention from the insane military expenditures by tacking on a bit of spending for energy. To what extent does the prime minister think she can fool the country with these sly cosmetic maneuvers? For years, we’ve been saying what should be done: revise the disastrous agreements on economic constraints and military spending signed by the government, promote joint investments in Europe as in 2020, truly recover resources by taxing the windfall profits accumulated by arms giants, banks, and energy companies to protect citizens and businesses that have paid knees, instead of fooling it with last-minute little letters, should apologize, admit the mistake, and step aside.”
