"It is a big mistake to underestimate the crisis. We must act immediately to suspend the Stability Pact," declared Prime Minister Giorgia Meloni, considering the situation in the Middle East.
Yesterday, EU Commission President Ursula von der Leyen said there was no reason to ease budget constraints.
Arriving at the wine fair, Giorgia Meloni also announced the suspension of the defense agreement with Israel: "Due to the current situation, the government has decided to suspend the automatic renewal of the defense agreement with Israel."
This agreement aims to promote trade pacts with Israel, particularly in the defense sector, and to facilitate military research and development. Initially approved in 2005, it was to be automatically renewed every five years. The suspension is therefore a political signal against the attacks and raids carried out by the Israeli army in Lebanon and the military campaign in Iran, actions that have already been condemned by Italy and European governments.
The suspension of the memorandum with Israel was formalized in a letter sent by Italian Defense Minister Guido Crosetto to his counterpart in Jerusalem, Israel Katz.
The text consists of 11 articles and is a “framework” that regulates relations between the two states in defense matters. Article 3 sets out verbatim “the principles governing cooperation between the parties, which will be developed, among other things, through: meetings of the Ministers of Defense or their representatives, the exchange of information and experiences of mutual interest in defense matters, the conduct of joint exercises, the invitation of observers, the exchange of information and cultural activities, and port calls of naval units and aircraft. The parties encourage their respective industries for research, development and production in the military sector.”
"The possible suspension of the Stability Pact could certainly help. Of course, we will have to see how things go in the coming days, but I think Europe should not underestimate the impact that this crisis could have in the coming months," said Meloni.
"The suspension should not be understood as a measure directed at individual member states, but as a general measure," the prime minister explained.
The Prime Minister also addressed another issue closely related to the crisis in the Middle East: the use of Russian gas.
"Pressure on Russia is the most effective weapon for building peace. I hope that if a problem arises, the emergency will be over and Europe will not need Russian products," Meloni said.
Claudio Descalzi, president of Eni, had expressed support for lifting the embargo on Russian gas. “Descalzi is a sector operator,” Meloni added. Deputy Prime Minister Matteo Salvini also favors reopening the Russian gas taps.
Giorgia Meloni had called for Brussels to suspend the Stability Pact, but the situation is very complicated. The crisis is weighing on Italy's public finances, especially after the decision to cut fuel excise taxes to support consumption and the economy. Italy is currently under EU infringement procedures and therefore cannot exceed a 3% deficit, but has pledged to fall below this threshold. Giorgetti had hoped to reach the target by 2026, but ISTAT data shows that the target is likely to be missed.
Suspending the Stability Pact would allow governments to take on more debt, introduce subsidies, cut utility bills and provide economic aid. But it would undermine the very foundation of EU budgetary policies. Italy also risks not being able to cover the increased military spending it had committed to NATO from its deficit.
However, Ursula von der Leyen has a different opinion: “Regarding economic interventions, it is better for states not to worsen their deficit levels.”
This is even more difficult for countries with high public debt like Italy, France or Belgium, which certainly do not have the fiscal space that Germany has.
