Susanna Riva The Eurogroup met in Luxembourg amid heightened financial tensions: high deficits, rising debt, and rising government bond spreads are pushing the Commission to call for more prudent management of public finances.
European Commissioner for Economy, Valdis Dombrovskis , recalled that, despite the difficulties, Member States must respect the fiscal rules to maintain the credibility of the EU fiscal framework.
His statement was followed by a series of formal requests from Italy and Greece, both of which asked to be able to use the "flexibility clauses" introduced in the new Stability Pact.
The current picture: deficit, debt and pressure on the markets
According to Dombrovskis, deficits remain too high and debt levels in some countries continue to rise, fueling fears among investors.
Widening interest rate spreads highlight the growing perception of risk, especially for economies with public debt exceeding 100% of GDP.
Remarks by Commissioner Dombrovskis
The EU economy chief called the moment “crucial for fiscal policy”, saying fiscal plans for 2027 must be very prudent.
He also reiterated that strict compliance with the rules is essential to confirm the credibility of the entire European fiscal framework .
The new margins of flexibility introduced by the 2023 pact
The Stability Pact, reformed at the end of 2023, already includes a series of “ flexibilities ” designed to manage unexpected shocks, such as rising inflation or the energy crisis resulting from the prolonged closure of the Strait of Hormuz.
Inflation, energy and the national safeguard clause
One of the most significant innovations is the ability to recognize the impact of higher-than-expected inflation on the trajectory of net spending . This provision directly responds to the requests made by Italian Economy Minister Giancarlo Giorgetti in his letter to Ursula von der Leyen . The energy clause , already approved, allows countries to absorb energy price shocks without having to increase government bond yields.
Dombrovskis emphasized that, despite the presence of such margins, states must use the flexibility provided with caution , avoiding constant changes that would undermine the robustness of the regulatory framework. He also highlighted the " countercyclical nature " of the new pact, as opposed to the previous procyclical model.
Reactions from the countries concerned and Eurogroup colleagues
Italy has submitted a letter to Minister Giancarlo Giorgetti and Greek Finance Minister Kyriakos Pierrakakis , requesting a broader interpretation of the national safeguard clause. The aim is to ensure that the rules can be applied to the current energy context without compromising the sustainability of the accounts.
Italy and Greece
Dombrovskis responded that he would examine Rome and Athens' requests in detail, but also noted that the current rules already offer support tools. Minister Giorgetti expressed confidence that "good technical reasons will lead to the correct interpretation of the rules," pointing to the energy clause already approved.
Spain, Belgium, the Netherlands and Germany
Spanish Finance Minister Carlos Cuerpo has expressed openness to considering proposals for greater flexibility, as long as the "sustainability" of public finances remains guaranteed. Belgian Minister Vincent van Peteghem , despite debt at 108% of GDP, has expressed reservations about introducing national clauses, suggesting that any measures should be temporary.
His German colleague, Lars Klingbeil , recalled that European fiscal rules had just been revised and insistently called for concrete measures to lower energy prices, proposing a tax on extra profits.
The most critical was Dutch Finance Minister Eelco Heinen , who defined the safeguard clause for Italy as “not in favor” and reiterated the need to reduce the debt and carry out structural reforms rather than resorting to new derogations.
The debate shows a consensus: EU fiscal rules have already been given cushioning margins, but their application must remain limited so as not to undermine the credibility of Europe's commitment to sustainable public finances.