Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Italy's Meloni hails "courageous" budget, opposition plans protests

Stock Markets Nov 22, 2022 10:47AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Italian Prime Minister Giorgia Meloni walks after an emergency meeting at Nusa Dua in Bali, Indonesia November 16, 2022. Firdia Lisnawati/Pool via REUTERS

By Giuseppe Fonte and Gavin Jones

ROME (Reuters) -Italian Prime Minister Giorgia Meloni presented her government's first budget on Tuesday, calling it a "courageous" package even as the opposition said it targeted the poor and planned street protests.

The 2023 budget, approved by cabinet in the early hours of the morning, focuses on curbing sky-high energy bills and cutting taxes for payroll workers and the self-employed.

It now goes to parliament, which must pass it by the end of the year.

"I consider it a courageous and coherent budget, courageous in the sense that it bets on the future," Meloni told reporters, adding that she had taken tough decisions regardless of the consequences for her new government's popularity.

The package, which contains almost 35 billion euros ($35.84 billion) of extra spending and tax cuts, aims to speed a recovery in the euro zone's third largest economy which the Treasury says will contract in this quarter and the next.

The main opposition parties dismissed the budget as inadequate to tackle recession and double-digit inflation, and accused the government of targeting the poor by cutting a "citizens' wage" poverty relief scheme for the unemployed, introduced in 2019.

Enrico Letta said his centre-left Democratic Party would organise street protests on Dec. 17, while former Prime Minister Giuseppe Conte, leader of the left-leaning 5-Star Movement, called the cuts to the citizens' wage "inhuman".

The budget allocates over 21 billion euros next year in tax breaks and bonuses to help firms and households pay electricity and gas bills. This comes on top of some 75 billion euros of similar measures approved this year.

A further 4.2 billion euros are set aside next year to cut 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.

BRIDGE TO SICILY

Among numerous other measures, the budget lowers the retirement age, offers fiscal incentives to encourage hiring on open ended contracts, reduces penalties for people who have not paid their taxes, and revived plans for a bridge to connect Sicily to the mainland - a pet-project of Italy's right.

It also looked to encourage Italians to have more children and reverse the shrinking population, a problem often cited by Meloni, including an increase in child benefit, extra support for large families, a tweak to parenting leave and a cut in sales taxes on baby products such as nappies.

Next year's budget deficit is targeted at 4.5% of gross domestic product, up from a 3.4% forecast made in September.

Extra borrowing will finance 60% of the 35 billion euros of economic support, while 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.

With a tax rate rising from 25% to 35% from January to July 2023 and calculated on profits instead of revenues, the new levy will raise some 2.5 billion euros next year, Meloni said.

It follows a framework proposed by the European Commission and replaces a scheme that triggered criticism and refusals to pay from numerous energy firms.

The curbs on the citizens' wage, which the rightist coalition says discourages people from seeking work, is particularly contentious.

Next year, able-bodied people of working age will only be able to draw the benefit for a maximum of eight months, ahead of abolition of the scheme in its current form from Jan 1, 2024.

Antonio Misiani, the PD's economics spokesman, said the budget was a "war on the poor" which favoured tax evaders.

Meloni, who has always opposed the citizens' wage, insisted it was wrong "to put people who can work on the same level as those that can't".

"Faithful to our principles, we'll keep helping those who can't work. For the others it will be abolished," she said.

($1 = 0.9766 euros)

Italy's Meloni hails "courageous" budget, opposition plans protests
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email