ITALY approved on Friday (Sep 16) a new aid package worth some 14 billion euros (S$19.7 billion) to shield firms and families from surging energy costs and consumer prices, government officials told Reuters.
Probably the last major act by Prime Minister Mario Draghi before the Sep 25 national election, the new package comes on top of some 52 billion euros already budgeted since January to soften the energy crisis in Italy.
The scheme is funded through higher value added tax revenues as a result of rising electricity and gas bills, and by other adjustments to the state budget, without any increase in borrowing, government officials have told Reuters.
Draghi has rebuffed pressure from several parties to hike this year’s fiscal deficit above the target of 5.6 per cent of national output set in April.
Rome plans to introduce a new scheme of state guarantees to help companies facing liquidity problems due to sky-high electricity and gas prices, Draghi’s office said. Also plans to boost and extend until the end of the year some tax breaks that lower electricity and gas bills for firms.
The package extends through November a cut in excise taxes on fuel at the pump, currently due to expire on Oct 17. Hospitals are due to receive 400 million euros to help pay energy bills.
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