Prime Minister Giorgia Meloni’s aim to reduce Italy’s deficit and avoid the EU’s special monitoring has resulted in a trimmed budget with limited room for expansive policies, sparking demands from her coalition’s hard-right faction for financial sector contributions.
The government and banks are still negotiating a potential tax, with the hard-right League, of which Giorgetti is a part, seeking between €4 billion and €4.5 billion from various measures, according to sources. These measures would also affect insurers, according to one source.
Recently, the government suggested reviving a failed 40 percent tax on 2023 “windfall” profits at a lower rate, as reported by POLITICO. Banks have agreed to temporarily suspend tax incentives, extending last year’s measure.
Key policies in the upcoming budget, which Italian lawmakers will review, propose a €9 billion reduction in middle-class income taxes from 35 percent to 33 percent and €2 billion to adjust salaries to the cost of living after prolonged stagnation.
The draft, to be submitted to the European Commission on Wednesday, also allocates €3.5 billion for “anti-poverty measures” and €2.4 billion for healthcare in 2026.
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