London Daily

Focus on the big picture.
Thursday, Jul 24, 2025

Italy's Meloni to unveil budget with 30 bln euros to lift economy

Italy's Meloni to unveil budget with 30 bln euros to lift economy

Italy's new right-wing government signed off on its first budget on Tuesday, a package focusing on curbing sky-high energy bills and cutting taxes from next year for payroll workers and the self-employed.

Prime Minister Giorgia Meloni hopes the spending boost will speed a recovery in the euro zone's third largest economy, which the Treasury has forecast will contract in the current quarter and the first quarter of next year.

The budget bill was approved at around half-past midnight (23:30 GMT), Meloni's office said, after a three-hour cabinet meeting. It now goes to parliament, which must pass it by the end of the year.

The measures total almost 35 billion euros ($35.84 billion), with Rome planning to fund around 60% of the package by driving up next year's budget deficit to 4.5% of gross domestic product (GDP) from 3.4% forecast in September.

Other sources of funding include an increase in a windfall tax on energy companies that have benefited from the surge in oil and gas prices, the Treasury said in a statement.

With a tax rate rising from 25% to 35% until July 2023 and calculated on profits instead of revenues, the new levy follows a framework proposed by the European Commission and replaces a scheme which has triggered criticism and refusals to pay from numerous energy firms.

The budget tightens the terms of the "citizens' wage" poverty relief scheme for the unemployed, which the rightist coalition says discourages people from seeking work.

Next year, able-bodied people of working age will only be able to draw the benefit for a maximum of eight months, ahead of complete abolition of the citizens' wage from Jan 1, 2024.

The budget allocates over 21 billion euros next year to help firms and households pay electricity and gas bills.

To boost pay packets, it sets aside some 4.2 billion euros to cutting the "tax wedge" - the difference between the salary an employer pays and what a worker takes home - with the benefit going to low income workers.

The package also introduces fiscal incentives aimed at encouraging the hiring on open ended contracts of women under 36, fixed-term workers and people drawing the citizens' wage.


SLOWING ECONOMY


With inflation biting, Italy's economy is forecast to grow just 0.6% next year after a figure of 3.7% this year, according to the latest Treasury estimates, which are more upbeat than those of many independent forecasters.

Implementing one of Meloni's flagship fiscal proposals, the budget extends a 15% single tax rate for the self-employed to annual income of up to 85,000 euros, compared with the current ceiling of 65,000 euros.

With a view to building a huge bridge connecting Sicily to the Italian mainland, a long-time pet-project of Italy's right, to oversee the project the bill relaunches a dedicated state-backed company that had been put into liquidation.

One of the most contentious measures in the budget is an amnesty on tax arrears of up to 1,000 euros stemming from before 2016. Critics say such amnesties, which are not uncommon in Italy, encourage people not to pay their taxes.

The budget also conditionally reduces the retirement age next year, stipulating that Italians will be able to draw a pension from the age of 62 provided they have paid in at least 41 years of contributions.

Under a rule put in place for just this year by Meloni's predecessor Mario Draghi, people are granted a state pension at 64 provided they have worked for 38 years.

With an eye to the cost of living, the budget cuts the VAT sales tax on some essential consumer staples such as baby-care products and female sanitary tampons to 5% from 10%.

($1 = 0.9766 euros)

Newsletter

Related Articles

0:00
0:00
Close
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
×