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Economy

Italy Plans to Approve 2027 Budget on Wednesday as EU Deficit Talks Progress

Italy plans to approve its budget law for 2027 on Wednesday, Economy Minister Giancarlo Giorgetti said, as talks with the European Union progress over a temporary increase in the fiscal deficit. The plan would fund about 23.5 billion euros in tax cuts and spending increases.

By admin Oct. 27, 2026 · 8:43 PM ET 1 min read

A classical stone government building with tall columns in Rome at dusk, with an empty paved plaza in front

Italy plans to approve its budget law for 2027 on Wednesday, Economy Minister Giancarlo Giorgetti said Tuesday, as talks with European Union authorities progress over a temporary increase in the fiscal deficit. The cabinet is expected to meet Wednesday at 1100 GMT, Reuters reported.

Speaking at a conference on Italy’s regions, Giorgetti said spending requests from ministries were far above Italy’s budgetary capacity. He said: “These are very intense times, we’re working day and night.”

What the budget would pay for

Italy aims to fund tax cuts and spending increases worth around 23.5 billion euros ($26.22 billion) next year, Reuters reported. It would be the last budget under Prime Minister Giorgia Meloni before national elections due in 2027. About half of the funding would come from the EU’s National Escape Clause, which gives a temporary and partial exemption from the bloc’s budget rules.

People walking away from the camera along a narrow shopping street in Rome lined with old stone buildings

The escape clause now covers higher defense spending and green investments, but Italy wants to use part of the room to help families with surging energy costs, Reuters reported. Giorgetti said progress had been made with the European Commission and that the government believed it could finalize the admissible proposals by Tuesday night.

Rooftops and domes of Rome at sunset under a cloudy sky

Italy estimates its budget deficit will rise to 3.4% of gross domestic product next year, from 2.9% expected in 2026, before easing to 3.2% in 2028. Banks, insurers and other financial firms are expected to contribute through higher taxes worth around 5 billion euros. Options under discussion include a higher corporate tax on the financial sector and a higher tax on financial transactions, according to people familiar with the matter cited by Reuters.

Reporting based on coverage by Reuters.

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