EU resists Greece and Italy’s bill relief

Greece and Italy asked the EU to let them spend beyond their agreed budget limits to soften this winter's energy bills, and the European Commission pushed back after euro area finance ministers met on 8 October (Reuters). What Brussels has backed is narrower: extra room for investment that cuts future fossil fuel imports. Any help with current bills still has to fit inside each country's existing spending limit.

Two letters, one argument

Prime Ministers Kyriakos Mitsotakis and Giorgia Meloni both wrote to Commission President Ursula von der Leyen. Mitsotakis argues that if pricier energy brings in more VAT (the sales tax on most purchases) than Greece budgeted, Athens should be able to spend part of that windfall on temporary, targeted support without breaching its spending ceiling (Greek prime minister). He named fishermen as one group in difficulty but published no cost or eligibility rules.

Italy's Finance Minister Giancarlo Giorgetti made a parallel case. He says Rome's spending targets were agreed on an assumption of 1.8% inflation, against a September reading of 4.1%, and he wants the EU to weigh that gap when judging compliance (Reuters). Rome had already been considering whether to channel extra tax receipts into fuel relief (To Brief).

The political pressure is easy to see. Energy prices in the euro area were 18.8% higher in September than a year earlier (Eurostat). That figure explains why ministers want to act. It does not show how much extra VAT Athens has collected or how much room Rome has, and neither government has published those numbers.

Economy Commissioner Valdis Dombrovskis replied that the EU cannot keep adding new forms of fiscal flexibility, though he said the Commission would examine both requests more closely (ANSA).

Why more tax money doesn't raise the ceiling

The EU's budget rule limits how fast "net expenditure" can grow. That is roughly government spending minus interest payments, held to a multi-year path each country agrees with the Council of national finance ministers.

The limit applies to spending alone, so revenue never enters the calculation. If VAT receipts jump because energy costs more, the ceiling stays where it was. The design keeps a one-year windfall from turning into spending that outlasts it. Giorgetti's complaint is the mirror image: when prices rise faster than planned, a spending path fixed in advance buys less.

The consequence is practical. Governments may still fund energy relief, but only by finding room inside their existing path (Commission services note). That leaves Athens and Rome two options. Relief inside the ceiling means cutting or delaying something else in the budget. Relief above it needs EU approval and would likely be financed with extra borrowing, which future taxpayers repay.

The exception Brussels has backed

The approved route runs through the national escape clause, an existing provision that lets a country temporarily spend above its agreed path. In August the Commission extended it beyond defence to projects that durably cut reliance on imported fossil fuels (Commission guidance). For Greece, eligible spending includes items such as heat pumps (Commission recommendation on Greece).

The extra room is small. It is capped at 0.3% of GDP (gross domestic product, the total value of what an economy produces in a year) annually, and 0.6% in total over 2026–28 (Commission guidance).

This money also reaches different people. A heat-pump subsidy pays out first to households and firms able to commission the work, and to the installers who do it. A tenant facing a high bill this winter gets little from it in the near term.

The approvals are still in progress. Greece's file is on the agenda for today's meeting of finance ministers, who take the formal decision (ECOFIN agenda). The Commission issued its recommendation for Italy on 8 October (Commission recommendation on Italy), so Rome is still waiting for the Council.

EU leaders will discuss energy relief at their summit on 15–16 October (Costa's invitation). No date has been set for the Commission and Council to rule on the broader requests. As things stand, the Commission has backed extra room for eligible energy investment, subject to formal approval. Neither government has won extra room for immediate bill relief, so any help Athens or Rome offers this winter must come out of spending they had already planned.