“I am satisfied because the Commission, in a move that would have been unthinkable just a few months ago, has adopted our proposals, the result of long, serious, and discreet work,” Italy’s finance minister Giancarlo Giorgetti said in a statement.
The Commission announced the plan during its “European Semester,” where it judges countries against its rulebook, which limits budget deficits, the difference between what a country spends and collects in taxes, to 3 percent of economic output and tries to keep debt around 60 percent of GDP.
The waiver is limited to investments worth 0.6 percent of GDP over three years until 2028, but governments cannot spend more than 0.3 percent of GDP over a single year. This would allow heavily indebted governments to free up extra budget space to support citizens and companies from higher energy bills.
Brussels will formally lay out which measures are eligible for the green investment exemption in the coming weeks, said a senior Commission official.
The waiver does not cover all energy subsidies to households and businesses that are impacted by rising fuel costs. It focuses on investments that EU countries have put in place since February, when the war started, to reduce their reliance on fossil fuels.
The waiver can apply to “large scale investment projects in energy grids, rolling out renewables,” the EU’s economy commissioner Valdis Dombrovskis said during a press conference Wednesday.