UPDATE 1 — Italy exit from EU budget procedure at risk due to deficit increase, central bank warns

Exit from EDP is a key goal of Italy's economy minister Deficit hike reflects Italy's use of EU escape clause EU needs to be convinced that consolidation is lasting (Adds details, background throughout) By Giuseppe Fonte ROME, Oct 12 (Reuters) — Italy's plan to run a budget deficit above 3% of GDP both in 2027 and 2028 could complicate the country's plan to exit from the European Union's infringement procedure, the Bank of Italy said on Monday. Paving the way for Italy's exit from the disciplinary procedure is a longtime goal of Economy Minister Giancarlo Giorgetti that would set ⁠a seal on Rome's fiscal consolidation efforts. Italy said this month that its deficit in 2026 would fall within the EU's 3% of GDP limit for the first time since 2019, only to rise again from next year as the government uses leeway granted by Brussels ​to lift defence spending and mitigate the impact of rising energy costs. Addressing lawmakers, representatives from the Bank of Italy warned about the risk of missing the target due to "an asymmetry" within the framework of European rules. The EU leeway would prevent the opening of an infringement procedure (EDP) due to excessive deficit, should it exceed t