Understanding Italy’s Medium-Term Structural Budget Plan: Aiming for €12 Billion Annually

The Medium-Term Structural Budget Plan: A Key Element of the 2025 Budget Law

The Medium-Term Structural Budget Plan is a significant new addition to the 2025 Budget Law in Italy.
This document is pivotal for Italy’s credibility in Brussels.
But what exactly does it entail and why is it essential?

This so-called structural plan stems from the reform of the Stability and Growth Pact, approved by EU institutions in late April 2024.
It reintroduces rules related to debt and deficit limits for member states, following the temporary suspension of budget constraints during the pandemic.

Countries with public debt exceeding 60% of GDP or with a deficit above 3% must present a detailed document outlining their trajectory for net aggregate spending, reforms, and investments over a four- to five-year period.
This timeline can extend to seven years under specific conditions.

Understanding the Medium-Term Structural Budget Plan

As a consequence of the Stability and Growth Pact reform, the Medium-Term Structural Budget Plan is mandated for EU member states exceeding budgetary limits, including Italy.
According to the official note from the Ministry of Economy and Finance (MEF), this plan serves to define the trajectory for net aggregate spending that complies with new regulations.

After approval by the Council of Ministers, it will be submitted to Parliament before being sent to Brussels—a procedure chosen strategically by Italy.

Financial Implications for Italy

Italy begins this process with a deficit of 7.4% for 2023 and a public debt reaching over 137% of GDP.
The plan requires a gradual deficit reduction of 0.5 percentage points annually and a debt reduction of 1 percentage point each year over seven years.

In numerical terms, achieving this goal necessitates about 10-12 billion euros per year through public spending cuts, increased tax revenues, and measures aimed at productivity and sustainable growth.

The Timeline for the Medium-Term Plan

The schedule is tight: the Council of Ministers will approve the plan on September 17, with final decisions likely due on September 24, after the publication of definitive economic data.
Following parliamentary approval, the plan will be presented to the European Commission in early October.

However, the deadline imposed by Brussels for presenting this plan on September 20 will not be met, as confirmed by Minister Giorgetti.