by Giancarlo Navach and Giuseppe Fonte
Cernobbio, Italy (Reuters) – Rome wishes an “de -escalation” on customs duties, said Italian Minister of Economy on Saturday, Giancarlo Giorgetti, warning against retaliatory measures with regard to the United States and calling for greater budgetary flexibility.
“We should avoid launching a policy of customs counter-tariffs which could be damaging for everyone and especially for us,” he said during an economic forum near Milan.
“We have to try to keep a cool head,” he added.
Donald Trump imposed customs duties of 20% on all products from the European Union. To mitigate the economic impact of these surcharge, Giancarlo Giorgetti believes that the European Union should allow member states to increase their expenses without being targeted by a breach of budgetary rules.
Italy, very indebted, regularly asks the European Union to let it have a greater room for budgetary maneuver.
Within the framework of EU governance, the commitments made to the European Commission in terms of reduction in public spending may be suspended in the event of “serious economic recession” in the euro zone.
The Bank of Italy revised its gross domestic product (GDP) for the third economy in the euro zone at 0.5% on Friday. The government, for its part, was tabling in September on GDP growth of 1.2%.
“In recent days, there has been a question of business assistance, but this aid is a state intervention which must be authorized by EU rules,” said Giancarlo Giorgetti.
Italy has undertaken to bring back its public deficit under the threshold of 3% of GDP in 2026, against 3.4% in 2024.
The government is expected to reduce its growth forecasts for this year and for 2026 next week with the presentation of its new economic projections.
“Italian public debt means reduced budgetary margin for our country, a constraint that must be taken into account in all the decisions we make,” said Giancarlo Giorgetti.
The Italian debt, which is proportionally the second highest in the euro zone, should reach almost 138% of GDP in 2026, against 135.3% last year.
(Giancarlo Navach and Giuseppe Fonte report, written by Gavin Jones, Claude Chendjou)
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