What is the infringement procedure and what does Italy risk

An infringement procedure for excessive debt by the European Union towards Italy appears to be certain.
This was confirmed by our Minister of the Economy, Giancarlo Giorgetti, in a hearing at the joint Budget commissions of the Chamber and Senate.
“Since the suspension of the Stability and Growth Pact introduced following the pandemic and extended due to the energy crisis ended at the end of 2023 – declared Giorgetti -, based on the net debt recorded by Italy last year (7.2% of GDP according to the first ISTAT estimates) it is obvious that the European Commission will recommend to the Council to open a procedure for excessive deficit against ours and several other countries".
The decision regarding Italy and the other EU countries with an excessive deficit will be taken at the end of June, i.e.
after the European elections with the postponement dictated by the need not to influence the electoral campaign, but our government already expects to receive the dreaded letter from Brussels.
But what is the infringement procedure? What are the risks for Italy? Given the obvious decision by the EU, let's see what our country is facing together with a dozen other member states including France.
read also Pensions and taxes, nothing but reforms: Italy towards the infringement procedure for the debt The infringement procedure for excessive deficit According to the words of Giancarlo Giorgetti for Italy the opening of an infringement procedure for excessive deficit, with the letter from the European Commission expected to arrive at the end of June.
The infringement procedure is triggered if one of the EU member states does not respect one of the two parameters of the Stability Pact, which returned into force from 1 January 2024 after its suspension during the pandemic period: the budget deficit exceeds 3% of GDP ; public debt exceeds 60% of GDP and does not decrease by 1/20 per year (on the average of the three previous years).
The process of the infringement procedure to correct excessive levels of budget deficit or public debt of a member country first requires a report by the Commission, with Ecofin – the Economy and Finance Council composed of the competent ministers of the 27 Member States – who is then called upon to formulate an opinion.
The ball then passes to the Council which issues recommendations if deviations from community regulations are found; the targeted State thus has 3 to 6 months to demonstrate that it has taken steps to remedy the existing situation.
As Openpolis reports, if this does not happen the Council can take four paths: request additional information; invite the European Investment Bank to reconsider its lending policy to the state; require the State to establish an interest-free deposit with the Union until the excessive deficit is corrected; impose fines.
The decisions taken cease to be in force only when the Member State corrects the deficit: the Council thus, at the request of the Commission, puts an end to the infringement procedure.
The risks for Italy So far, the infringement procedure for excessive deficit has been triggered twice for Italy: in 2005 and 2009, both times Silvio Berlusconi was at the helm of the government.
Our country has been the subject of reports nine times, but on seven occasions it has been saved.
Now, however, everything would point to a new infringement procedure – we would thus equal the unedifying record of three held by Malta -, given that in 2023 Italy's debt/GDP ratio stood at 137.3% and the deficit 2024 should be according to government forecasts at 4.3%.
Italy could soon be called upon by the EU to correct its level of debt deficit: in all likelihood the government will have to adhere to a three-year plan containing a structural correction of the deficit equal to 0.5% per year.
The corrective arm that Italy is preparing to enter as a result does not appear to be particularly severe – the tune will change from 2027 when the new rules of the Stability Pact will be fully applied -, but the promised reforms of pensions and taxes are unlikely to be seen light as well as a cut in public spending will be expected.
What is an infringement procedure In general, the infringement procedure is one of the most effective – and feared – tools in the hands of the European Union to try to enforce rules and commitments by the 27 member states.
The decision is taken by the Commission which can act on its own initiative, following a report from the European Chamber or from private citizens.
If the European Commission finds that a country has violated an EU law, it sends a "letter of formal notice" giving the government in question two months to present its observations.
In the absence of a response to the letter or reasons deemed valid, the Commission issues a reasoned opinion warning the country in question to put an end to it by a set date.
In the event that the Court of Justice finds that the Member State has failed to fulfill its obligation regarding the infringement procedure, it issues a ruling with the applicable sanctions which consist of a daily penalty and a lump sum, calculated by the Commission on the basis of three specific criteria: the seriousness of the infringement, the duration of the infringement and the need to guarantee the dissuasive effectiveness of the sanction.
According to these criteria, for Italy the minimum lump sum is equal to 7,038,000 euros.