MNI: Italy Mulling EUR7-8 Bln Extra To Offset Energy-Sources

The Italian government is considering a fresh EUR7-8 billion package to mitigate the impact of the rise of energy prices on households and companies, Forza Italia senator Dario Damiani and a Finance Ministry source told MNI.

Damiani said Finance Ministry Chief of Staff Giuseppe Chine told him the value of the package, which is likely to be announced next week when the government publishes a new macroeconomic framework. This will include a bigger fiscal deficit than expected in October because of the war in Ukraine, finance ministry sources told MNI.

While a Finance Ministry source confirmed what Damiani had said about the new package, an official spokesperson declined to comment, only noting that any future measures will not add to spending.

“With the new macroeconomic framework we may announce the deficit will be higher because of the war, but we won’t increase the size of the budget,” the spokesperson said.

PARTIES WANT MORE

Last week Prime Minister Mario Draghi announced EUR4 billion in tax cuts to reduce oil prices and energy bills for families and companies for one month, to be financed by a new windfall tax on energy companies. The move came on top of an earlier EUR16 billion in measures to offset the effect of rising energy prices.

But political parties supporting Draghi’s coalition, and even some government ministers, have been calling for a bigger response to the squeeze on household budgets. The one month tax holiday is not enough, Damiani told MNI, adding that the additional EUR7-8 now planned would be a step in the right direction.

The Italian government also hopes that this week’s European summit will provide more European moneyfor its economy, as well as a relaxation of state aid rules to support businesses harmed by the crisis in Ukraine.