BRUSSELS — Italy is leading a rearguard effort to water down environmental rules in the EU’s next €2 trillion budget, opening a new divide that threatens to further complicate already thorny negotiations, according to three EU diplomats with knowledge of the discussions.
Rome’s right-wing government is pushing to derail a proposed new rule to stop countries spending EU money in a way that damages the environment, warning these plans will starve entire sectors of funding and undermine efforts to bolster the bloc’s competitiveness vis-à-vis the U.S.
“In a world in which the United States and China are mobilizing billions upon billions to boost their own industry and competitiveness, Europe cannot … become an obstacle to its own industry and competitiveness,” Italian Prime Minister Giorgia Meloni told the national assembly in June.
Italy is targeting the European Commission’s “Do No Significant Harm” (DNSH) rule in the EU executive’s proposed budget for 2028 to 2034, which has fueled a backlash from governments, business lobbies and the center-right European People’s Party.
