Meloni presses Brussels for energy relief as subsidy deadline nears

The deadline is Friday 22 May, and Rome is running out of time. Without an extension of the fuel excise duty cut, diesel prices could climb above €2.20 per litre while petrol risks moving back beyond the €2 threshold.

Giorgia Meloni’s government is determined to avoid that outcome, but the political problem is rapidly becoming a fiscal one. Extending the measure would require at least €200-300 million in additional resources, and Palazzo Chigi has yet to identify where the money will come from.

Brussels has become the government’s preferred route. 

Meloni is negotiating with the European Commission in search of greater flexibility on energy costs, while quietly using the political weight of the Safe fund — one of Ursula von der Leyen’s flagship initiatives — as leverage in the broader discussion.

Officially, the Commission continues to strike a cautious tone. “It is not possible, there are other options,” remains the public line. Behind closed doors, however, EU officials point to two recurring principles: Member States should first use resources already available and fully exploit existing European funding instruments, which Brussels insists remain substantial.

Around €300 billion for energy-related investments is still theoretically available through mechanisms such as Next Generation EU, cohesion funds and the Modernisation Fund, with roughly €95 billion yet to be allocated.

The Commission is also preparing broader EU-wide responses, including the AccelerateEU package and revisions to the ETS system involving around €4 billion in free allowances. None of those measures, however, are expected before the summer. Too late for Rome.

G7 diplomacy and the 3 June test

With Brussels neither fully closing the door nor offering immediate financial relief, negotiations are now unfolding on several fronts.

Finance ministers are gathered in Paris for the G7 Economy meeting, where Economy Minister Giancarlo Giorgetti is working alongside his French and German counterparts in search of political backing.

Attention is also turning towards 3 June, when European Commissioner Valdis Dombrovskis will present the Commission’s annual Spring Package assessments for each member state.

Italian officials believe the review could open the door to what some privately describe as a “deferred political understanding”. If Giorgetti’s fiscal management is judged sufficiently credible, Rome could potentially secure a pathway out of the excessive deficit procedure despite a projected overshoot equivalent to 0.1% of GDP, roughly €2 billion.

In return, Italy would likely be expected to commit to stricter fiscal discipline in 2027 and 2028.

For now the scenario remains politically fragile and procedurally uncertain, while the pressure on fuel prices is immediate.

Emergency decree increasingly seen as unavoidable

The only realistic short-term option now under discussion is a one-month emergency decree extending support measures until 22 June.

The package would likely mirror the previous intervention, worth around €500 million and divided into two tranches. The first would be released immediately, while the second would depend on updated VAT revenue estimates expected in mid-June. 

Officials believe around €200 million may be sufficient to cover the immediate Friday deadline.

Much now depends on the position of other member states and on how far Friedrich Merz’s Germany is willing to support additional flexibility. Berlin remains one of the leading voices of Europe’s so-called frugal camp, yet is also viewed as one of Meloni’s most important political interlocutors.

Germany has repeatedly warned in recent days against excessive debt expansion across Europe, while simultaneously acknowledging Italy’s structural vulnerabilities.

“We are entirely dependent on imported energy, we have public debt above 3% and the government loads around 40% of bills with excise duties,” said Carlo Fidanza, head of Fratelli d’Italia’s delegation in the European Parliament. 

“The Strait of Hormuz problem affects everyone, but for us everything is more complicated. And this cannot simply fall back on Europe.”

Brussels leaves room for manoeuvre

For its part, the Commission insists it is closely monitoring developments and remains ready to act within the flexibility already available under existing EU rules.

Officials at the Italian Treasury are said to remain cautiously optimistic, largely because Rome is not formally seeking a new exemption from the Stability Pact for energy spending. Instead, Italy is arguing for an extension — under comparable conditions — of the flexibility already granted for defence expenditure.