The European Commission substantially confirms Economy Minister Giancarlo Giorgetti's interpretation regarding the use of PNRR savings. The instrument "is not a cost-based tool, but a results-based one," and therefore the flow of payments may "not be perfectly aligned" with actual expenditure incurred by the state, EU Economy Commissioner Valdis Dombrovskis clarified. This would be the mechanism that makes it possible to find the funding for the suspension of the vehicle registration tax through the PNRR.
Dombrovskis stops short of calling those savings "national funds" that the Government can use "as it sees fit," as Giorgetti did, but acknowledges that "there is a certain margin in terms of liquidity management." This clarification comes as anticipation grows in Rome over an even more significant issue for Italy's public finances: on Tuesday, 22 April, Istat will update the 2025 deficit/GDP figure. Should it fall from the current 3.1% below the crucial 3% threshold and subsequently be officially confirmed by Eurostat on 21 October, Italy would be on track to exit the excessive deficit procedure. Giorgetti himself, speaking on Friday in Dublin, said he was "hopeful."
The stakes go beyond symbolic value. Exiting the excessive deficit procedure and returning to the ordinary arm of the Stability Pact would allow Italy to make greater use of the national safeguard clause, the NEC, requested for additional investments in defence and energy security. On one hand, going beyond the 3% deficit/GDP ceiling for measures agreed under the NEC would not trigger the excessive deficit procedure again. On the other hand, Italy would gain an immediate credibility boost in financial markets. And this comes at a time of tensions over certain sovereign bonds, which are being closely watched in the Eurozone.
Meanwhile, the examination of Italy's request to extend the NEC to energy security also appears to be proceeding without any particular obstacles. According to information filtering out of Brussels, the list of expenditures submitted by Rome would be consistent with the categories of intervention agreed at European level by the Twenty-Seven with the Commission and the ECB (within the Economic and Financial Committee). The list is still undergoing technical scrutiny by experts, but at this stage it appears highly unlikely that it will not receive the green light.
The green light could come as early as the EU Ecofin Council on 9 October, although the timing is not yet certain. Further reinforcing the prospect of an examination without particular obstacles are the remarks by Environment Minister Gilberto Pichetto Fratin who, responding to a question about Elly Schlein's letter on energy, stated that some proposals coincide with assessments already made: regarding the "14 billion in deviation" under the NEC, he explained, "together with the Economy Ministry we have listed a series of actions" that are "also compatible with the direction set by the European Union." Measures which, he added, "must concern the public and private building stock."
On the PNRR front, Dombrovskis's clarification softens what just twenty-four hours earlier had appeared to be a rift between Rome and the Berlaymont. Giorgetti had essentially argued that savings on the Plan's loans are now "national funds" because loans taken out through the European facility are repaid by the state budget regardless, and in the event of savings, fiscal space is freed up for other purposes. The Latvian commissioner made a significant opening, while clarifying that he would need to review exactly what Giorgetti had stated: "there is some margin in terms of liquidity management," because the PNRR "is not a cost-based instrument, but rather a results-based one." Payments, in other words, would be disbursed independently of a perfect match between the amount received and the expenditure actually incurred: what matters are the results. And from this arises the possible "misalignment."
Dombrovskis: 'Kyiv's 2027 financing needs are rising but there is little room for new loans'
Ukraine's financial needs for 2027 will be higher than expected and Brussels expects to quantify them "in relatively short order," also presenting new proposals to address them. However, Kyiv now has "limited room" to receive new loans, due to debt sustainability concerns. This was stated by EU Economy Commissioner Valdis Dombrovskis on the sidelines of the informal Ecofin meeting in Dublin.
"It is clear that Ukraine faces greater financing needs," Dombrovskis explained, when asked about the talks held yesterday with Ukrainian Finance Minister Sergii Marchenko, who was also present in Dublin. Among the reasons cited, he pointed to the escalating intensity of Russian aggression and the Black Sea blockade, which are weighing on the country's economy.
The commissioner did not, however, quantify the new financing needs: "We also need some inputs from the International Monetary Fund and our teams are working very closely together," he explained. "I think that in relatively short order we will be able to quantify the gap and also to present proposals on how to manage the situation relating to 2027." Dombrovskis also underscored that previous IMF estimates for 2027 assumed that the war would end next year. "Unfortunately, this now appears less likely," he observed, pointing to "many objective reasons" for an increase in financial needs, even amid "extreme uncertainty."
On how to cover them, he warned that "Ukraine faces debt sustainability challenges" and that there is therefore "limited room to simply provide more debt," meaning new loans. The EU support package for Ukraine already adopted, he stressed, has "very strong grant-equivalent characteristics," and the same principle holds in discussions around the new financing needs. Under the previous European framework, he recalled, the goal was to cover roughly two-thirds of Kyiv's financing needs, leaving the remaining third to other international partners. Brussels continues to work with these partners to encourage them to "step up their commitment" and provide their share of the financing.
Reproduction reserved © Copyright ANSA
