Italian Prime Minister Giorgia Meloni is not happy with Ursula von der Leyen.
The Italian government sent a formal letter this week to the European Commission urging Brussels to treat the energy crisis as a real emergency. Beyond introducing minor flexibilities and rehashing old measures, it has called on member states to cut taxes on energy to ease the burden on consumers. Rome feels the Commission has done next to nothing to cushion the impact of three months of surging energy costs.
Since US strikes on Iran started in late February, gas prices have risen by 50% and oil has jumped by around 65%, according to the Commission’s own estimates. For a country like Italy, with a large manufacturing economy, that can be devastating in the long run. Contrary to what some might think, Italian SMEs are among the strongest performers in Europe and are closely integrated with German industry. But unlike Berlin, Rome does not have the budgetary space to secure energy at any cost. That is also because the Italian government is seeking to reduce its deficit and large debt pile with an eye on financial markets.
Every Italian prime minister worries about the impact of bond vigilantes — the idea that in adverse financial conditions, investors may target Italy as the weakest link, push borrowing costs up, and ultimately force a change of government, in the same way markets helped push Silvio Berlusconi out.
For Meloni, who has benefited from significant leeway from investors during her premiership as markets have rewarded her degree of stability, the issue is also political. In 2027, she will be running for re-election, and she knows a campaign centred around caro vita, caro-energia (high cost of living, high energy prices) could cost her majority. The problem for Meloni is that her hands are tied; any meaningful relief on the energy front can only come from Brussels.
Commission figures see the Italian economy growing by only 0.5% this year, weighed down by the energy shock triggered by the Strait of Hormuz closure. The country’s debt is expected to reach 139% of GDP in 2027, and in order to exit its excessive deficit procedure after breaching the 3% deficit ceiling, Rome will have to tighten its belt. Meloni cannot spend her way out of the energy crisis. The fact that interest rates are sharply higher than during the 2020 pandemic, or even the 2022 Russian gas shock, does not help her case either.
That also explains her letter's tone — fiery, by diplomatic standards.
When governments leak their private communications to the Commission, the goal is clear: to signal that backchannel diplomacy has not sufficiently addressed their concerns, and that they are prepared to take their fight into the public arena to get what they want. In her letter, Meloni argued that tackling the energy crisis is just as important as building Europe’s defence and security.
On that basis, if the Commission is willing to carve out defence spending from deficit calculations, it should also do the same for energy measures. That is something Brussels has so far resisted, while pushing for targeted national measures. The Commission argues that Meloni cannot get what she wants — a blanket exemption for energy — because the macroeconomic situation has not deteriorated so severely as to warrant it. The Italians argue that the Commission should not wait for a recession; it should put in place measures to avoid one.
If she does not get relief on energy, Meloni also suggested that Italy would be forced to skip a major defence programme put forward by the Commission to rearm Europe. In political terms, that is a serious escalation.
But Brussels should handle this carefully. Antagonising Giorgia Meloni, who has proven a useful ally, would be unwise. And the Commission could end up amplifying a conversation that is already permeating Italy’s power circles. If it is a question of complex supply and pricing, why not turn to Russian energy? After all, the Americans have extended a waiver on Russian oil at sea, and the UK has watered down some of its own restrictions (London insists it is not a waiver).
It is no secret that part of Italian industry would welcome, to put it in polite terms, an easing of sanctions if that lowered production costs. The same applies to parts of the Italian government itself, including the Lega group led by Matteo Salvini, who has shown a fascination with Russia and would also welcome a return to business ties. Notably, Salvini and much of Italian heavy industry share roots in Lombardy in the north of the country.
This week, I sat down with Economy Commissioner Valdis Dombrovskis, who told me the EU will not ease sanctions on Russia, calling Russian gas a “tool for strategic manipulation and blackmail”. When I asked whether he feared member states would begin to lobby for a reversal, he shut down my question entirely, saying there is no going back to Russian energy; it is a strategic decision.
Two things can be true at the same time. A return to Russian energy would be a political and moral failure for the European Union and would dismantle its entire “Stand with Ukraine” strategy.
But come Christmas, Europeans have to heat their homes, and factories have to stay running. Made in Europe cannot compete with the US and China while facing double the energy costs. The EU managed to diversify and unplug from Russia, but it came at a cost. Plans to go bigger on renewables to produce green energy sound great on paper, but as it stands today, they do not provide the energy security a continent of 450 million people needs.
Meloni is putting her interests first, but she has also exposed the fragility of the broader system. Brussels should think carefully and give her some slack.
| 
