Fuel tax cut and help with energy bills: Italy approves inflation aid package

Italy on Thursday night approved new measures worth around 17 billion euros ($17.4 billion) to help families and businesses manage the surging cost of fuel and essentials.

Published: 5 August 2022 09:18 CEST

Fuel tax cut and help with energy bills: Italy approves inflation aid package

New aid measures announced on Thursday are hoped to boost Italy's consumer spending power as the cost of everyday goods rises. Photo by Vincenzo PINTO / AFP)

As expected, the final version of the ‘aiuti-bis‘ decree provides another extension to the existing 30-cents-per-litre cut to fuel duty, more help with energy bills, and a tax cut for workers earning under 35,000 euros a year.

The package also includes further funding for mental health treatment: there’s another 15 million euros for the recently-introduced ‘psychologist bonus’ on top of the 10 million previously allocated.

There are also measures to help agricultural firms deal with this year’s severe drought.

Italian Prime Minister Mario Draghi described the new package as an intervention “of incredible proportions”, which corresponds to “a little over 2 points of national GDP”.

However, he said, no changes were made to the national budget to pave the way for the new measures.

The measures will be funded with 14.3 billion euros in higher-than-expected tax revenues this year, and the deployment of funds that have not yet been spent, Economy and Finance Minister Daniele Franco said.

Italy has already budgeted some 35 billion euros since January to soften the impact of rising fuel costs.

The decree is one of the last major acts by outgoing Prime Minister Mario Draghi before an early general election next month.

Elections are set for September 25th but the former European Central Bank chief is staying on in a caretaker role until a new government is formed.

Draghi said the Italian economy was performing better than expected, citing the International Monetary Fund’s estimate of three percent for 2022.

“They say that in 2022, we will grow more than Germany, than France, than the average of the eurozone, more than the United States,” he told a press conference.

But he noted the many problems facing Italy, “from the high cost of living, to inflation, the rise in energy prices and other materials, to supply difficulties, widespread insecurity and, of course political insecurity”.

Inflation hit 8 percent in Italy in June – the most severe spike the country has experienced since 1986.

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The strike comes after Albanian Prime Minister Edi Rama — who is close to Meloni — called a top RAI editor to complain about a television report into Italy’s controversial migration deal with his country.

The Usigrai trade union called the strike from May 6 to May 7 saying talks with management had failed to address their concerns.

It cited numerous issues, including staff shortages and contract issues, but in first place was “the suffocating control over journalistic work, with the attempt to reduce RAI to a megaphone for the government”.

It had already used that phrase to object to what critics say is the increasing influence over RAI by figures close to Prime Minister Meloni, who leads Italy’s most right-wing government since World War II.

However, another union of RAI journalists, Unirai, said they would not join what they called a “political” strike, defending the return to “pluralism” at the broadcaster.

Funded in part by a licence fee and with top managers long chosen by politicians, RAI’s independence has always been an issue of debate.

But the arrival in power of Meloni — leader of the far-right Brothers of Italy party, who formed a coalition with Matteo Salvini’s far-right League party and the late Silvio Berlusconi’s right-wing Forza Italia — redoubled concerns.

Tensions erupted at the weekend amid accusations RAI censored a speech by a leading writer criticising Meloni ahead of Liberation Day on April 25, when Italians mark the defeat of Fascism and the Nazis at the end of World War II.

Both RAI’s management and Meloni have denied censorship, and the premier posted the text of the monologue on her social media.

In another twist, Albania’s premier confirmed Thursday he called senior RAI editor Paolo Corsini about an TV report on Sunday into Italy’s plans to build two migration processing centres on Albanian territory.

Rama told La Stampa newspaper the report was “biased” and contained “lies” — adding that he had not raised the issue with Meloni.

The “Report” programme claimed the costs of migrant centres, which are under construction, were already “out of control” and raised questions about criminals benefiting from the project.