Greek Prime Minister Kyriakos Mitsotakis is urging the European Commission to grant national governments greater fiscal latitude to protect households and businesses from a deepening energy-price shock, according to a letter reviewed by Euronews.
“We need more breathing room to protect our citizens and businesses. We must find the additional necessary flexibility within the Economic Governance Framework to allow Member States to take additional support measures while safeguarding fiscal sustainability,” the letter, dated 30 September, states.
Addressed to Commission President Ursula von der Leyen and Eurogroup President Kyriakos Pierrakakis, the correspondence warns that Europe’s latest energy crisis is persisting longer than anticipated. Mitsotakis cites escalating attacks on energy infrastructure in the Middle East as a threat that could transform the situation into both an economic and political challenge for Athens.
Greece carries the highest national debt among the EU’s 27 member states. Although the economy is expanding, a raft of generous subsidies and sweeping tax cuts has complicated efforts to reduce the debt burden. To cushion households from rising costs, Athens has deployed substantial cash assistance for energy bills, fuel, and agriculture. Simultaneously, Mitsotakis has reduced income and property taxes to bolster voter support and stimulate business activity ahead of parliamentary elections scheduled for 2027.
Artificially suppressing energy prices
Several EU nations have already committed billions of euros in tax relief and subsidies to buffer against soaring prices. However, governments are approaching a fiscal breaking point. As Belgian Prime Minister Bart De Wever bluntly acknowledged when ruling out broad measures to address rising energy costs, “there is no money.”
The Greek leader highlighted sharp price increases since the United States and Israel launched military operations against Iran on 28 February: EU pre-tax gasoline prices have surged 53%, diesel 66%, while natural gas has climbed from just over €30/MWh to approximately €70/MWh.
Across most EU countries, electricity prices have exceeded €100/MWh over the past month, up from €42/MWh before the Middle East disruption, with some markets nearing or surpassing €200/MWh. Mitsotakis argues the problem has extended beyond energy costs to their knock-on effects on broader inflation and household affordability.
Greece proposes that temporary national measures supporting consumers and businesses be excluded, up to a defined limit, from the EU’s net-expenditure indicator — a cap on how rapidly a government can increase day-to-day spending. The proposal also calls for governments to account for additional VAT revenues generated by unexpectedly high inflation linked to energy prices.
If adopted, these adjustments would grant governments more fiscal space to subsidise or otherwise assist citizens and businesses without triggering the same constraints under EU fiscal rules. Mitsotakis expects the request to be debated at the gathering of energy ministers in Brussels later this month and at next year’s summit of EU heads of state and government.
“It is not politically acceptable that the main course of action proposed by the Commission so far is just to reduce energy demand. We need to have on the agenda a broader set of ideas that speak to the urgency of the current moment,” the letter reads.
Italian Prime Minister Giorgia Meloni has echoed the call for looser fiscal rules, according to Italian media reports from 30 September. Meloni has previously advocated greater fiscal flexibility, as Italy holds the second-highest national debt in the EU.