Italy To Approve $14.5 Billion Package Against Inflation
Italy plans to approve on Thursday a new aid package worth around 14.3 billion euros ($14.5 billion) to help shield firms and families from surging energy costs and consumer prices, government officials said.
The scheme, one of the last major acts of outgoing Prime Minister Mario Draghi before a national election next month, comes on top of some 33 billion euros budgeted since January to soften the impact of sky-high electricity, gas and petrol costs.
A draft decree seen by Reuters showed that Rome planned to extend to the fourth-quarter of this year existing measures aimed at cutting electricity and gas bills for low-income families as well as reducing so-called "system-cost" levies.
Designed to help finance initiatives ranging from solar power subsidies to nuclear decommissioning, the levies typically accounted for more than 20% of Italian energy bills before the government started to act.
Among a raft of measures, the government will extend a 200 euro bonus paid in July to low and middle-income Italians to workers who did not previously receive it.
A cut in excise duties on fuel at the pump scheduled to expire on Aug. 21 is set to be extended to Sept. 20.
Rome is also considering preventing energy companies from making unilateral changes to electricity and gas supply contracts for households until October, according to the draft.
With tax revenues doing better than forecast, funding for the package will not drive up the public deficit target, which Rome last week confirmed at 5.6% of national output this year.
Some 1.6 billion euros will go to reducing in the second half of this year the so-called tax wedge, the difference between the salary an employer pays and what a worker takes home, with the benefit going to employees with an annual income worth less than 35,000 euros.
The Organisation for Economic Cooperation and Development (OECD) estimated that in 2021 the average single worker in Italy lost 46.5% of his gross salary in taxes and social contributions, the fifth-highest ratio out of a group of 38 advanced nations.
To support purchasing power of elderly people, the government will bring forward to the fourth quarter of 2022 a 2% revaluation of pensions scheduled for 2023, at a cost for state coffers of around 2.4 billion euros.
($1 = 0.9835 euros)
(Editing by Keith Weir)
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