Italy has warned it could pull out of the European Union’s SAFE defense financing program unless Brussels allows member states greater budget flexibility to tackle soaring energy costs.
Prime Minister Giorgia Meloni raised the possibility in a letter to European Commission President Ursula von der Leyen, escalating tensions between Rome and EU authorities over fiscal rules and emergency spending.
The Security Action for Europe (SAFE) instrument is a joint EU borrowing scheme designed to strengthen the bloc’s defense capabilities and help member states meet higher NATO spending commitments.
In the letter, seen by Reuters, Meloni argued that the EU should extend the same budget exemptions currently granted for defense spending to energy-related measures aimed at protecting households and businesses from the ongoing energy crisis.
“Italy considers it necessary to temporarily extend the scope of the National Escape Clause, which already applies to defense spending, to include investments and extraordinary measures needed to address the ongoing energy crisis,” Meloni wrote.
Under the EU’s “escape clause”, member states are allowed to exceed deficit limits either to increase defense spending or respond to exceptionally adverse economic conditions. The defense-related flexibility can be used for four years starting from 2025, allowing deficits to rise by up to 1.5% of national output annually through 2028.
Meloni said it would be politically difficult for her government to justify using the SAFE program if similar flexibility was not granted to address the energy crisis.
“Without this necessary political consistency, it would be very difficult for the Italian government to explain to the public why it might resort to the SAFE program,” she wrote.
Extending the budget leeway to energy spending could allow Italy to finance aid measures worth more than 30 billion euros for companies and households struggling with rising energy prices.
However, such a move would likely derail Rome’s current plans to reduce its budget deficit below the EU’s 3% of GDP ceiling this year.
The European Union has so far rejected calls to treat energy spending in the same way as defense investment, arguing that the current energy crisis does not justify a deviation from fiscal rules.
Italy had already warned last month that surging energy costs could undermine its ability to meet commitments to increase defense spending.
“We cannot justify to our citizens that the EU allows financial flexibility for security and defense in the strictest sense, but not to protect families, workers, and businesses from a new energy crisis,” Meloni said in the letter.
