European Union finance ministers meet in Brussels today for a double session of economic talks, with Italy's request to spend more on defence under the bloc's fiscal rules at the top of the agenda.

The Eurogroup, which brings together the finance ministers of the euro area, gathers at 09:00 in the Europa building under its president, Kyriakos Pierrakakis. The full Economic and Financial Affairs Council, known as ECOFIN, follows at 15:00, chaired by Simon Harris, the Irish Tánaiste and Minister for Finance.

Ministers will be invited to approve Italy's use of the national escape clause for defence financing. The clause, part of the EU's reformed economic governance framework, allows a member state to deviate from its agreed spending path when exceptional circumstances outside its control have a major impact on its public finances. The Council's background brief points to Russia's war against Ukraine and the threat it poses to European security as such a circumstance.

The flexibility covers four years and allows up to 1.5 per cent of GDP in extra room from a country's endorsed net expenditure path for increased defence spending. The same decision would also cover measures to strengthen energy security, although the budgetary cost of those measures is capped at 0.3 per cent of GDP per year and 0.6 per cent cumulatively by the end of 2028.

Defence financing dominates the Eurogroup's afternoon session too. In its inclusive format, ministers will discuss how best to use public resources and joint procurement for defence, with NATO Secretary General Mark Rutte joining the discussion.

The morning Eurogroup session will also take stock of macroeconomic and fiscal developments in the euro area and receive an update on the digital euro and innovation in central bank wholesale payment systems. The European Central Bank is preparing the technical groundwork for a digital euro, while negotiations on the legislation continue between EU institutions.

Ministers will additionally hear reports from the banking union, including the twenty-fourth hearing of the chair of the supervisory board and an update from the Single Resolution Board.

The ECOFIN agenda also includes a political agreement on updated EU tobacco taxation rules, an exchange of views on the recovery and resilience facility, and a discussion of the economic and financial impact of Russia's war against Ukraine. As of 5 November, around 457.5 billion euros had been disbursed under the recovery and resilience facility.

The Eurogroup will hold a press conference at around 13:30, followed by the ECOFIN press conference at around 18:45. The meetings come as the EU prepares for a leaders' summit on 26 and 27 November, where heads of state and government are expected to reach a political agreement on the next president of the European Central Bank.