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 fateful 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 the assessments will be based on the 2026 deficit, likely at 2.7–2.8 per cent instead of the 2.9 per cent forecast in April. “We take note of this, not without regret,” commented the Minister for the Economy, Giancarlo Giorgetti.
The long battle against illegitimate tax credits from the Superbonus has not been enough. Perhaps this was also due to timing issues, as not all the tax credits blocked by the Revenue Agency and the Finance Police managed to be excluded 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 harboured since the summer of 2025, as revealed by discussions 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 plan 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 against 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 an additional multi-year deficit of 14 billion for energy and 22 for defence, and both Houses approved the resolutions mandating 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 Europe as it grapples 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 in businesses and residential properties, security of supply and so on: objectives characterised by significant structural weight but little electoral appeal, as their effects are destined to be felt in the medium to long term and in a way that is barely perceptible to the general public.

Failure to exit the Pact’s corrective arm has no direct consequences for the budget, for one simple reason. As regards its potential practical consequences, the excessive deficit procedure is currently ‘suspended’ for countries which, like Italia, comply with the limits on net primary expenditure agreed with Brussels. In short, the ‘fiscal framework’ is currently hypothetical and does not result in sanctions: departing from it, therefore, would not create additional fiscal space, despite the many narratives on the subject that have circulated in recent weeks.