The European Commission is weighing a proposal to grant member states extra
fiscal flexibility to cushion rising energy costs tied to tensions with Iran,
people familiar with the matter said. Under the proposal, governments would be
allowed additional energy-related spending outside EU fiscal rules equivalent to
roughly 0.3% of GDP, implemented as an exemption clause akin to the existing
defense-spending carve-out. Italy, already highly indebted and facing elevated
energy bills, has been among the strongest advocates for expanded fiscal leeway.
