(Bloomberg) — Italian Premier Giorgia Meloni’s government is preparing a new package worth €4.9 billion ($5.3 billion) that extends support to low-income families while weaning others off aid, according to people familiar with the matter.
(Bloomberg) — Italian Premier Giorgia Meloni’s government is preparing a new package worth €4.9 billion ($5.3 billion) that extends support to low-income families while weaning others off aid, according to people familiar with the matter.
The money won’t require extra deficit spending by tapping a €21 billion reserve already set aside in the budget, as well as reaping the benefit of higher-than-expected economic growth, said the people, who declined to be named as discussions over the bill are ongoing.
A cabinet meeting this week is likely to approve the new package, which will grant aid for energy bills to families with revenues below €15,000 for at least another three months.
The move marks a new phase in Italy’s push to protect citizens and businesses from rising energy prices, an effort that has so far cost more than €90 billion. With inflation still high but slowing, Meloni and Finance Minister Giancarlo Giorgetti have decided it’s time to move to more targeted intervention.
That brings the government closer to removing the extra burden on Italy’s public finances at a time when its mammoth debts — exceeding 145% of output at the end of last year — remain under constant investor scrutiny, not least as the European Central Bank raises interest rates.
The outcome will mean higher costs for most Italians, particularly for electricity. Gas prices will likely continue to benefit from lower value added tax. Officials also intend to tweak tax breaks for companies to make them more targeted, cutting government expenditure.
Data on Friday is likely to show headline inflation in Italy, harmonized to European Union standards, probably slowed to 8.8% in March from 9.8% the previous month. Even so, underlying measures of consumer-price growth remain high, keeping up the cost-of-living squeeze.
Italians, like many of their European peers, face rising food bills as well. As part of a separate fiscal measure, the government is also looking into reducing or eliminating value added tax on basic staples such as pasta, bread and milk.
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