The European Commission has rejected requests from Italy and Greece for extra room under the European Union’s fiscal rules to soften the impact of high energy prices, arguing that the existing framework already offers enough scope to respond.
Dombrovskis said after the Eurogroup meeting in Luxembourg on October 8 that the EU could not keep introducing new fiscal flexibilities. Doing so would cast doubt on the bloc’s collective resolve to maintain a rules-based framework at a time when the credibility of that commitment was a vital asset, he said.
The Latvian commissioner said the revised economic governance framework already offered enough flexibility for the current situation. He called for fiscal prudence as bond yields and spreads inside the euro area have risen in recent weeks.
Asked whether that amounted to a refusal, Dombrovskis stopped short of closing the door and said the Commission would examine the two proposals in greater depth. He had held talks with the Italian and Greek economy ministers earlier the same day.
Rome has been pressing Brussels since the spring, when Prime Minister Giorgia Meloni wrote to European Commission President Ursula von der Leyen asking for energy security to be treated with the same indulgence as defence spending.
That campaign bore fruit in June, when the Commission extended the national escape clause used for defence to cover energy. Member states may spend up to 0.3 per cent of GDP a year until 2028 on measures strengthening the resilience of their energy systems.
Eurogroup President Kyriakos Pierrakakis said some ministers had spoken favourably about the Italian and Greek initiatives while others had voiced greater reservations. There was consensus, he said, on protecting households and those in need across Europe, but also on preserving fiscal stability and the credibility of the framework.
Ministers reaffirmed that support measures should be “temporary, targeted and tailored”. Some countries are being hit harder by costlier energy, others worry more about their public accounts.
Pierrakakis, who is also Greece’s finance minister, said the Eurogroup was vigilant about the bond market but not alarmed, attributing part of the rise in yields to global factors. Differentiation in spreads reflected how markets judged each country’s fundamentals and did not amount to fragmentation, he said.
The numbers explain the unease. The EU deficit is projected to reach 3.5 per cent of GDP in 2026 against 1.7 per cent a decade ago, while the average yield on 10-year government bonds has climbed from 1.1 per cent to 4 per cent.
The argument will now move up to leaders’ level, according to Pierrakakis, while Dombrovskis pointed to a more technical debate about how particular provisions of the rules should be read rather than any general opening of fresh margins.
