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COST OF LIVING

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.

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.

READ ALSO: What is Italy doing to cut the rising cost of living?

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 1976.

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ITALIAN ELECTIONS

Berlusconi to run for Senate in Italy’s elections

Scandal-plagued former premier Silvio Berlusconi said he plans to return to Italy's parliament in upcoming elections, almost a decade after being forced out over a conviction for tax fraud.

Berlusconi to run for Senate in Italy's elections

“I think that, in the end, I will be present myself as a candidate for the Senate, so that all these people who asked me will finally be happy,” the 85-year-old billionaire and media mogul told Rai radio on Wednesday.

After helping bring down Prime Minister Mario Draghi last month by withdrawing its support, Berlusconi’s centre-right Forza Italia party looks set to return to power in elections on September 25th.

It is part of a right-wing coalition led by Giorgia Meloni’s post-fascist Brothers of Italy, which includes Matteo Salvini’s anti-immigration League.

Berlusconi brushed off reports he is worried about the possibility of Meloni – whose motto is “God, country and family” – becoming prime minister.

Noting the agreement between the parties that whoever wins the most votes chooses the prime minister, he said: “If it is Giorgia, I am sure she will prove capable of the difficult task.”

READ ALSO: Italy’s hard right set for election victory after left-wing alliance collapses

But he urged voters to back his party as the moderate voice in the coalition, emphasising its European, Atlanticist stance.

“Every extra vote in Forza Italia will strengthen the moderate, centrist profile of the coalition,” he said in a separate interview published Wednesday in the Il Giornale newspaper.

League party leader Matteo Salvini (L), Fratelli d’Italia leader Giorgia Meloni and Forza Italia leader Silvio Berlusconi pictured in October 2021. The trio look set to take power following snap elections in September. Photo by CLAUDIO PERI / ANSA / AFP

Berlusconi was Italy’s prime minister three times in the 1990s and 2000s, but has dominated public life for far longer as head of a vast media and sports empire.

The Senate expelled him in November 2013 following his conviction for tax fraud, and he was banned from taking part in a general election for six years.

He was elected to the European Parliament in 2019, however, and threw his hat in the ring earlier this year to become Italy’s president — although his candidacy was predictably short-lived.

Berlusconi remains a hugely controversial figure  in Italy and embroiled in the many legal wrangles that have characterised his long career.

He remains on trial for allegedly paying guests to lie about his notorious “bunga-bunga” sex parties while prime minister.

Berlusconi has also suffered a string of health issues, some related to his hospitalisation for coronavirus in September 2020, after which he said he had almost died.

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