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MONEY

Italy extends energy bill discount and petrol tax cuts

The Italian government has outlined plans to lessen the impact of the cost of living crisis, from extending energy bill discounts to cuts on fuel excise duties.

Published: 3 May 2022 16:16 CEST
The French government has published guidelines on what to do if you are struggling to pay your energy bills.
The Italian government is expected to extend funding for energy bills and discounts on fuel taxes. Photo by Ina FASSBENDER / AFP

Italy approved a much-awaited set of financial measures on Monday to curb the soaring cost of living, driven by energy and fuel price hikes.

The stimulus package drawn up by Italy’s prime minister Mario Draghi is aimed at combatting the knock-on effects of the conflict in Ukraine, reportedly worth around 14 billion euros – double what was previously budgeted for.

READ ALSO: How to save money on your fuel in Italy

Energy bill payers will be able to take advantage of a government discount on gas and electricity bills for a further three months, as the government has extended the current ‘Social bonus for electricity and gas’ or ‘Bonus sociale energia elettrica e gas’ to the third quarter of 2022.

Energy bills have soared over the past year fuelled by the surging cost of gas imports, hitting a record in January. This has only been made worse since Russia invaded Ukraine, as Italy is more dependent on Russian imports of natural gas for energy than most of its European neighbours and produces very little of it within the country.

READ ALSO: Italy will ‘soon’ stop buying gas from Russia, says minister

In response, Italian authorities passed a new law in March for the second quarter of the year, aimed at lowering utility bills for those on lower incomes.

The bonus’s eligibility criteria had also been amended so that all homeowners with an ‘ISEE’, an indicator of household wealth, (Indicatore della Situazione Economica Equivalente) lower than €12,000 can benefit from the energy bill discount.

That marked an increase on the previous ISEE limit of around €8,000, meaning more bill payers can offset their energy bills – now, until September 2022.

READ ALSO:

The government has also extended its previous cuts to fuel excise duties to July 8th. The move had been introduced in late March to put a brake on soaring pump prices, when petrol surged to highs of over €2 per litre.

In this case, the excise duty will fall to “zero euros per cubic metre” and there will be a reduction in VAT to 5 percent – previously 22 percent – while a cut to the price of methane is also expected.

The financial moves are included in the government’s new energy and investment decree (decreto energia e investimenti), which is yet to be published in its final version.

Draghi said the package is intended to “protect the purchasing power of families and the most vulnerable, and companies’ production capacity”.

“The measures will fight the higher cost of living. The price spiral depends on a large part on the cost of energy,” he added.

“And that means that is a temporary situation which has to be confronted with exceptional instruments.”

Also included in the upcoming decree is a cash bonus of €200 for around 28 million Italians with annual earnings of less than €35,000 for both workers and pensioners, in a bid to curb the rising cost of living.

In other measures, Italian authorities extended the building ‘superbonus 110’, to give homeowners more time to claim government aid for delayed renovation works.

Since Russia invaded Ukraine, the Italian government has already set aside some €15.5 billion for various economic relief measures. With the latest round of financial help, the country is expected to inject a total of two percentage points of GDP into the economy by the end of 2022.

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ECONOMY

Two-thirds of young Italians now living with parents as unemployment rises

The number of people aged 18-34 still living at home is now as high as 75 percent in some parts of Italy, new official data shows, as wages shrink and youth unemployment grows.

Published: 16 May 2024 15:24 CEST
Two-thirds of young Italians now living with parents as unemployment rises

The stereotype of the Italian ‘mammone‘, who lives with mamma until well into his 30s or beyond, is alive and well as the number of young people living at home has risen again according to the latest annual economic report by national statistics bureau Istat, published on Wednesday.

In 2022, some 67.4 percent of all 18-34 year-olds in Italy were living with at least one parent, an increase of almost eight points in twenty years – the rate in 2002 was 59.7 percent.

The number was as high as 75 percent in the southern regions of Campania and Puglia, Istat found.

The phenomenon remained, as ever, more prevalent in young men, with 74 percent of them compared to 66 percent of women in the same age group living at home.

“Today’s young people have increasingly protracted transitions into adulthood,” read the report.

The phenomenon is not unique to Italy, with the most recent Eurostat data, from 2021, showing a similar trend among the 16-29 age group in Italy as well as other southern European countries including Croatia, Greece, and Portugal.

While cultural factors are often suggested as a potential cause, with Italians known for close family ties, Italy’s economic situation appears to play a far larger role in keeping young people living at home for longer.

Istat’s report pointed to a high prevalence of insecure employment among younger Italians, as well as shrinking wages and decreased spending power.

“Permanent employment, which between 2004 and 2023 grew by +9.7 percent, has increased only among the employed over the age of fifty,” Istat noted, partly attributing this to a squeeze on pensions in recent years which means many are retiring later.

READ ALSO:

Italy meanwhile has one of the EU’s highest rates of youth unemployment, which had risen further to 22 percent as of February 2024, according to Eurostat data.

Italian workers of all ages were getting poorer, Istat found, and the number of working people in poverty had risen to 14 percent.

“Despite the improvements observed in the labour market in recent years,” the report said, “Italy retains a very high share of employed people in economically vulnerable conditions.

“Between 2013 and 2023, the purchasing power of gross wages in Italy decreased by 4.5 percent, while in the other major economies of the EU27 it grew at rates between 1.1 percent in France and 5.7 percent in Germany.”

Within this context, the Istat report noted that young Italians were also getting married five years later than in 2002, with men now waiting until an average age of 36.5 before tying the knot, and women 33.6.

KEY POINTS: What is Italy’s government doing to help families?

The age at which women have their first child had also risen, to 31.6 years against 29.7 in 2002.

Italy’s birth rate in 2023 fell to a record low of 379,000 after 15 years of decline, Istat reported in January.

“The substantial decline in births of recent years has deep roots, and is due to the parenting choices (fewer children and increasingly later) of Italian couples today and those of yesterday,” Istat’s latest report found, reporting that lower birth rates 30 years ago also contributed.

Italy’s plunging birth rate and ageing population has been a hot-button topic for the current government, which said this month that it aims to launch a Vatican-backed campaign to increase births to 500,000 per year by 2033.

Italy’s birth rate had previously been boosted by a higher number of births among foreign nationals in Italy, however the number of babies born to non-Italian mothers had also dropped, Istat said, bringing it in line with the trend among the Italian population.

The shift was attributed to various factors, including the challenges immigrants face and the high employment rates among foreign women, many of whom are employed in demanding but low-paid full-time jobs.

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