By Giuseppe Fonte and Angelo Amante

ROME (Reuters) -Italy's main business lobby Confindustria called on Tuesday for billions of euros of state aid to help firms cope with high energy costs and the prospect of U.S. trade tariffs.

Speaking at Confindustria's annual assembly in the northern city of Bologna, chairman Emanuele Orsini said the European Union should also allow member states to raise spending to boost investments without breaching the bloc's fiscal rules.

"We need to act urgently" to lower energy costs, Orsini said, adding that businesses were facing "an unsustainable situation."

The funding for the aid package could come from an overhaul of Italy's EU-backed post-COVID recovery plan, alongside EU regional development funds, he said.

Last year, Italy's average electricity price reached 109 euros ($123.68) per megawatt hour, nearly double that in France.

With the possibility of a trade war between Europe and the United States adding to uncertainty, Orsini said the government should set aside 8 billion euros over three to five years in tax breaks to allow businesses to boost investment.

Speaking at the same event, Meloni said surging energy costs were the most pressing economic issue facing her government, but added that "spending public money cannot be the solution."

Confindustria is known for its calls for corporate tax cuts and state subsidies, while its member firms show little willingness to grant pay hikes to workers. Italian salaries are below the level of 1990 in inflation-adjusted terms.

Meloni said her government was conducting an assessment of the national energy market to determine whether high prices were partly the result of speculation.

She added that Italy was discussing with EU authorities alternative ways to spend up to 15 billion euros of already allocated EU funds, in order to boost the country's chronically weak productivity.

Rome has committed to bring its budget deficit below the European Union's 3% of gross domestic product (GDP) ceiling in 2026, from a 3.8% ratio posted in 2024.

($1 = 0.8813 euros)

(Reporting by Giuseppe Fonte and Angelo Amante in Rome, Gianluca Semeraro and Francesca Landini in Milan; editing by Gavin Jones)