Italy plans to spend €14 billion over two years to reduce energy costs for firms while seeking additional flexibility under European Union budget rules. Prime Minister Giorgia Meloni said she would write to European Commission President Ursula von der Leyen, arguing that energy-driven inflation should be considered when calculating permitted deficits. The national escape clause will support the spending, while Italy presses for further leeway without specifying additional measures. Meanwhile, Italy’s 10-year BTP yield rose above 4.70% to a fresh three-year high as stronger-than-expected euro-area inflation increased expectations for further European Central Bank rate hikes. The BTP-Bund spread reached its highest level since May 2025, and Italy’s 2025 deficit was confirmed at 3.1% of GDP, above the EU’s 3% EDP ceiling.