The Italian government has approved a draft budget that would aim to collect as much as €4.5 billion from Italian banks and insurers to help finance a modest package of tax cuts and support measures for health care and salaries.
In a statement late Tuesday, Italian Finance Minister Giancarlo Giorgetti estimated the package, worth an estimated €18 billion, “intervenes in a context of significant uncertainty.”
He added it would support “households’ purchasing power, businesses and social needs, while also ensuring the sustainability of public finances.”
Prime Minister Giorgia Meloni’s focus on slashing Italy’s deficit to escape an EU special monitoring regime has left the government with a slimmed-down budget with scarce headroom for flashy policies, prompting continued calls from the hard-right flank of her ruling coalition for “contributions” from financial institutions.
While ongoing discussions between the government and banks have yet to yield an agreement on what form the tax would take, the hard-right League, of which Giorgetti is a member, is seeking between €4 billion and €4.5 billion from a range of measures, according to two people familiar with the matter. The measures would also apply to insurers, one of the people said.
Earlier this week, the government proposed reviving a failed 40 percent tax on “windfall” profits from 2023 at a reduced rate, as POLITICO reported. The banks have already agreed to the temporary suspension of tax incentives, extending a measure implemented last year.
Major policies included in the draft budget, which Italian lawmakers will study in the coming months, include a €9 billion cut to income taxes for the Italian middle class to 33 percent from 35 percent and €2 billion to align salaries with the cost of living after years of stagnation.
The draft, which is due to be sent to the European Commission on Wednesday, also earmarks €3.5 billion for “anti-poverty measures” and €2.4 billion for health care in 2026.
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