Istat: the deficit remains at 3.1 per cent, hampering spending on energy and defence. What happens next?

No chance. Not even the appeal hearing paves the way for Italia to exit the EU’s excessive deficit procedure ahead of schedule. In the 2025 national accounts just released by Istat, the 2025 deficit remains at 3.1 per cent of GDP, and in absolute terms has actually risen by 355 million compared with the April estimates: thus remaining, once again, above the crucial threshold set in Maastricht 34 years ago.

To bid farewell to the corrective arm of the Stability Pact, we will therefore have to wait until next year, when assessments will be based on the 2026 deficit, likely to stand at 2.7–2.8 per cent rather than the 2.9 per cent forecast in April. “We take note of this, not without regret,” comments the Minister for the Economy, Giancarlo Giorgetti.
The long battle against illegitimate tax credits from the Superbonus has not been enough. Perhaps this is also due to timing issues, as not all the tax credits blocked by the Revenue Agency and the Finance Police managed to be removed in time from the official accounts, as recorded by the National Institute of Statistics. Formally speaking, the final decision will be made in November by the EU Commission, based on data to be certified by Eurostat on 21 October: but it is Istat’s figures that will determine the outcome.

The new figures have once again dashed the hopes expressed by the Government in recent weeks; in a repeat of the events of April, when the 3.1 per cent figure released by the National Institute of Statistics dashed the ambitions the government had been nurturing since the summer of 2025, as revealed by comparisons made at the time with analysts from the International Monetary Fund.
This time, however, the consequences are likely to be more pronounced. And immediate. A certified 2025 deficit below 3 per cent would, in fact, have led to the closure of the excessive deficit procedure. This would consequently have made it possible to budget for the 36 billion in deficit under the derogation granted over two years by EU rules for expenditure on energy and defence, without the additional deficit being included in the Stability Pact calculations. If, on the other hand, Italia were to remain within the corrective arm, the entire deficit would continue to be counted within these parameters in the coming years, further prolonging and complicating the process of exiting the procedure.
This latest statistical surprise could call into question the entire framework envisaged at the start of August, when Economy Minister Giorgetti presented to Parliament the proposal to plan a multi-year additional deficit of 14 billion for energy and 22 for defence, and Parliament approved the resolutions instructing the Government to begin negotiations with Brussels. In the new picture painted by the Istat figures, a rethink is back on the agenda.

This is a sensitive issue. Investment in defence, as well as being an essential step towards meeting the spending targets agreed with NATO, is a strategic priority for a Europe grappling with the growing threat of hybrid attacks from Russia. But they pose a political problem for the government, because earmarking 22 billion for this sector is certainly not seen as a vote-winner ahead of the upcoming elections; all the more so whilst inflation is taking its toll, and following the move on car tax, funds for other measures are proving difficult to find.
This is what the 14 billion earmarked for energy should address: however, as dictated by European rules, these funds are tied to investments in renewables, energy efficiency improvements for businesses and residential properties, security of supply and so on: objectives characterised by significant structural importance but little electoral appeal, as their effects are set to be felt in the medium to long term and in ways that are scarcely perceptible to the general public.

Without the clause being triggered, however, the process of drawing up the next budget – the last one before the elections – is also likely to become more complicated. Under the deficit exemption, it would in fact be possible to finance a portion of expenditure already provided for in the national budget, provided, of course, that it meets the EU criteria regarding eligible uses for the additional deficit. This would take some of the pressure off domestic budget trends, allowing for the introduction of new measures. The same approach was employed last year with the extraordinary restructuring of the National Recovery and Resilience Plan (PNRR), which provided 5.1 billion for the Budget Law in this way.