Published by Global Banking & Finance Review®
Posted on September 1, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleItaly is close to exiting the EU's excessive deficit procedure as its budget deficit approaches 3% of GDP, ECB President Lagarde announced.
ROME (Reuters) -Italy will soon leave the European Union's excessive deficit procedure as it is close to bringing its budget shortfall to 3% of gross domestic product (GDP), the president of the European Central Bank said on Monday.
Being under a so-called "excessive deficit procedure" reduces countries' room for manoeuvre on tax and spending because EU rules oblige them to cut their fiscal gap by a prescribed amount each year until it falls to 3% or below of GDP.
ECB President Christine Lagarde mentioned Italy's improving fiscal prospects while discussing the budget crisis in her native France, where the government is at risk of collapsing in a confidence vote next week.
"Italy is making very serious budgetary efforts today and will probably exit from (the EU procedure), getting soon to a deficit of 3%," Lagarde said in an interview with Radio Classique.
Economy Minister Giancarlo Giorgetti said in July that Italy could bring its deficit below 3% of GDP as early as 2025, paving the way for exiting the EU procedure in 2026, one year ahead of schedule.
In April, the government pledged to cut the deficit to 3.3% of GDP this year from 3.4% in 2024, and to 2.8% in 2026.
Italy is due to update its growth forecasts and deficit and debt targets this month under the so-called Document of Economy and Finance (DEF).
(Reporting by Giuseppe FonteEditing by Alvise Armellini and Frances Kerry)
Italy is close to bringing its budget shortfall to 3% of GDP, which is necessary to exit the EU's excessive deficit procedure.
Christine Lagarde noted that Italy is making serious budgetary efforts and is likely to exit the EU procedure soon, achieving a deficit of 3%.
Italy is expected to update its growth forecasts and deficit and debt targets this month under the Document of Economy and Finance.
The government has pledged to cut the deficit to 3.3% of GDP this year from 3.4% in 2024.
Economy Minister Giancarlo Giorgetti indicated that Italy could bring its deficit below 3% of GDP as early as 2025, allowing for an exit in 2026.
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