Italy approves new 14 billion euros aid package against inflation

ITALY approved on Friday (Sep 16) a new aid package worth some 14 billion euros (S$19.7 billion) to shield firms and families from surging energy costs and consumer prices, government officials told Reuters.

Probably the last major act by Prime Minister Mario Draghi before the Sep 25 national election, the new package comes on top of some 52 billion euros already budgeted since January to soften the energy crisis in Italy.

Draghi and his economy and energy ministers will unveil the measures in a press conference scheduled at 1315 GMT.

The scheme is funded through higher value added tax revenues as a result of rising electricity and gas bills, and by other adjustments to the state budget, without any increase in borrowing, government officials have told Reuters.

Draghi has rebuffed pressure from several parties to hike this year’s fiscal deficit above the target of 5.6 per cent of national output set in April.

Rome plans to introduce a new scheme of state guarantees to help companies facing liquidity problems due to sky-high electricity and gas prices, Draghi’s office said.

A draft seen by Reuters showed state export agency SACE would offer free of charge guarantees on loans with a rate no higher than that paid by government bonds with the same maturity.

The financing applies to energy bills issued in the last quarter of 2022, under the draft.

Among a raft of measures, the scheme envisages a 1-off 150 euro bonus for 22 million workers and pensioners with an annual income lower than 20,000 euros.

Rome also plans to boost and extend until the end of the year some tax breaks that lower electricity and gas bills for firms.

The package extends through November a cut in excise taxes on fuel at the pump, currently due to expire on Oct 17. Hospitals are due to receive 400 million euros to help pay energy bills. REUTERS