Giorgetti outlines the plan regarding the safeguard clause: more leeway for energy, less for defence

Italy will seek the maximum level of flexibility from the EU on energy (0.6 per cent), whilst on defence it will cap its expenditure at 0.9 per cent. This was outlined by the Minister for the Economy, Giancarlo Giorgetti, during the government’s policy statements, which took place this morning in the Chamber of Deputies and this afternoon in the Senate. The fiscal space cannot be used for temporary subsidies such as excise duty cuts. 

Giorgetti appeared before the Chamber of Deputies to officially announce the activation of the national safeguard clause. The government’s primary objective is to make use of the flexibility provided for under EU regulations to fund strategic expenditure in the areas of energy security and national defence. During his speech, the Minister for the Economy and Finance set out a clear outline of the requests that Italy will formally submit to Brussels.

The overall framework set out by European regulations includes a clause originally designed for military expenditure, amounting to 1.5 per cent per annum. The main change lies in the possibility of allocating a portion of this allocation to energy security, up to a maximum of 0.3 per cent per annum over a two-year period, bringing the potential total for energy to 0.6 per cent. In this regard, the government’s approach is geared towards making maximum use of the available allocations. Speaking to journalists before taking office, Giorgetti confirmed the intention to request the full allocation for energy security, a decision aimed at protecting households and the productive sector from the instability of the energy markets. The approach to strictly military expenditure, however, is different. For defence, the government does not intend to utilise the full theoretical margin, but to stop at 0.9 per cent. The combination of 0.6 per cent for energy and 0.9 per cent for defence thus makes up exactly the total quota of 1.5 per cent permitted under EU rules.

A key section of Giorgetti’s report concerned the eligibility criteria for measures eligible for funding under the clause. The Minister clarified precisely which expenditure categories will benefit from flexibility regarding budget balances and which must instead be covered within the framework of ordinary planning. All measures of a temporary or emergency nature remain excluded from the scope of the safeguard. The Ministry of the Economy has specified that measures aimed at temporarily alleviating the crisis, or direct and indirect subsidies – such as the reduction in excise duties on fuel – cannot be taken into account. The approach agreed at European level stipulates that any scope for exceeding the deficit limit must be reserved exclusively for structural and investment measures.

Giorgetti pointed out that the European Commission has invited the Member States concerned to submit their requests to activate or extend the clause by mid-August 2026, with an assessment in September and the formalisation of the recommendation at the October Ecofin meeting. Following the Council’s recommendation, he added, the process will proceed in a similar manner to the so-called budgetary deviation procedure, on which Parliament will be called upon to deliberate in the run-up to the next budget.