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4 Nov, 2022 11:40

Italy plans to spend billions to ease energy crunch – Reuters

Some of the funds will reportedly come from cuts to a poverty-relief scheme
Italy plans to spend billions to ease energy crunch – Reuters

Italy plans to set aside at least €15 billion ($14.6 billion) in next year’s budget to soften the impact of soaring energy costs on businesses and households, Reuters reported on Thursday, citing government sources.

A part of the funds will be raised by taking a slice out of the €9 billion earmarked in 2023 for a poverty relief scheme, Reuters adds.

According to the agency, recently elected Prime Minister Giorgia Meloni has already said she would postpone measures, such as higher pensions and tax cuts, which she had promised during her campaign, and redirect funds to deal with the effects of the ongoing energy crisis.

The bulk of the financing, however, will come from the funds freed up by raising next year’s budget deficit to 4.5% of gross domestic product (GDP), from the 3.4% that the government had projected in September.

The EU-wide regulations that limit government deficits in Eurozone countries to 3% of GDP were suspended during the pandemic. The European Commission postponed reinstating the fiscal discipline policy until 2024 because of the conflict in Ukraine.

Inflation in Italy jumped to 11.9% in October year-on-year, the highest rate since March 1984, according to provisional figures by the country’s national statistics office Istat.

The new budget estimates are set to be officially released on Friday and will later be included in the 2023 budget law.

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