Meloni secures the EU’s approval for the Energy Bills Decree and concessions on the ETS (though less so on flexibility)

For Giorgia Meloni, the European Council has two faces. On the one hand, the 27 Member States have adopted an agreement calling on the Commission to “update the assessment of all the impacts of ETS2”, the taxation mechanism for emissions not covered by the current carbon trading scheme (ETS). The Commission then gave the go-ahead to the measures contained in the Energy Bills Decree (including the cap on gas prices) and Meloni said: “This allows us to take action to lower energy bills”. But the Prime Minister, who at the same time was calling for greater flexibility, had to contend with opposition from the Nordic countries (and Germany). To address, for example, the protests by lorry drivers in the south, the scope for spending remains limited. Following a meeting between Meloni and Sánchez, the government also announced the imminent restoration of the Schengen Agreement between the two countries.

At the end of a full day of negotiations, which continued into the night between Thursday and Friday, European leaders reached an agreement. The conclusions state that the European Council calls on the Commission “to review all the impacts of ETS2, with particular reference to the structure of the system and the related safeguard measures”. The document also reaffirms “the need to ensure a functioning, transparent and predictable carbon market, by reducing the volatility of emission prices and limiting the impact on electricity costs”. The demands of the small group comprising Italy and the Visegrád countries have therefore been partially met. Although this reassessment will subsequently need to be reformulated in a more comprehensive manner. This compromise stems from the hardline positions of nations such as Sweden and Denmark, which are unwilling to abandon the ETS philosophy. However, regarding the call for greater flexibility – specifically, to consider “high prices as a decisive external factor” when reviewing budgetary constraints – Rome achieved little, as the negotiations ended in a stalemate. German Chancellor Friedrich Merz even called for a cut compared to the multi-annual budget estimates. Meloni, however, at the end of the proceedings, said she was “optimistic about flexibility after discussing it with President von der Leyen”. Yet, as the Prime Minister herself admitted, the debate is “still a long way off. Even though we have defended the resources for Cohesion Policy and the Common Agricultural Policy”. Then, in the middle of the afternoon, Palazzo Chigi, following lengthy negotiations led by Deputy Minister Vannia Gava, announced an agreement with the European Commission on the Energy Bills Decree. It will last for 18 months and, modelled on the Spanish scheme, will provide refunds to thermal power producers when the gas price on the TTF exceeds a certain threshold (expected to be close to 58.9 euro€/MWh). This timing is particularly ‘fortunate’ at a time when tensions are rising due to protests and roadblocks by lorry drivers, which are paralysing the south in particular (with serious consequences for fuel supplies). Indeed, Meloni announced that ‘the government is working on a response for the lorry drivers’. This protest risks becoming entangled with national and international issues. It is no coincidence that yesterday, whilst Ukrainian President Volodymyr Zelenskyy was being received in Brussels by European leaders (from whom he was seeking a further 70 billion euros), the Vannacci supporters of Futuro Nazionale were once again attacking Meloni for her support for Kyiv: “With the crisis affecting the whole country, with the tears of our farmers, with the anger of lorry drivers, and with a government preparing to roll out a budget that is practically useless in solving Italians’ problems, this request from Zelensky is obscene,” argues Futuro Nazionale member Sasso.

In reality, the government turned up empty-handed at the European negotiating table, given that the new military aid package is still missing in action (and Meloni said at the press briefing: “Minister Crosetto will decide”). However, the farmers’ protest is also affecting another section of the ruling coalition: Salvini fears it could escalate precisely whilst he is busy at the Lega’s extraordinary congress. For this reason, he is stepping up efforts to collect signatures from delegates, thereby ‘thwarting’ the Garavaglia motion (which requires at least 80 signatures from delegates to stand as a candidate, but from at least four different regions). In this regard, however, it was Salvini himself who summoned the sector to the Ministry of Infrastructure and Transport (MIT). He stated that he had “already asked the Ministry of Economy and Finance (MEF) for at least 80 million to tackle the high cost of fuel immediately”. Yesterday was not a fortunate day for his ministry, given the delays at airports. That is the situation within the League. There is also some unease within the majority in Forza Italia. Mainly because within the party, they have not taken kindly to the five-billion-euro contribution requested from banks and insurance companies to finance the budget. “I don’t mind if the banks are willing to help us. Banks and insurance companies have already been of extraordinary help in the recent past,” said Paolo Zangrillo, Minister for Public Administration, yesterday. He added, however: “I do get a bit concerned when I hear talk of ‘extra profits’.” That is precisely what those in Cologno and Segrate have always maintained. Marina and Pier Silvio Berlusconi, it seems, have not taken kindly to this new solution, which is regarded as an emergency measure. This comes in the wake of the Italian Banking Association (ABI) openly attacking Giorgetti, referring to the measures as “blows”.