Italy will present a new package to support the economy and energy security
© Reuters. FILE PHOTO: People wearing face masks walk in Duomo Square as the Lombardy region becomes a ‘red zone’, locking in as the country struggles to reduce coronavirus (COVID-19) infections, at Milan, Italy, March 15, 2021. REUTERS / Flavi
By Giuseppe Fonte and Gavin Jones ROME (Reuters) – Italy will on Thursday approve a package of measures worth more than 9 billion euros ($8.96 billion) to bring down energy prices, increase gas production and preserve stocks ahead of winter, two government officials told Reuters. The spending will push this year’s budget deficit to 5.6% of gross domestic output, from a previously forecast 5.1%, according to the Treasury’s annual Economic and Financial Document (DEF) released last week. More than half of the money will be used to extend until the end of the year tax breaks and subsidies for energy-intensive businesses and poor households, which were introduced by the previous government and funded until November. A cut in excise duties on gasoline that was due to expire Nov. 18 will also be extended until the end of December, officials said. In terms of energy security, the package will commit 4 billion euros to strengthen gas storage before winter by allowing the public company Gestore dei Servizi Energetici (GSE) to keep certain strategic stocks acquired in the second half of this year . Under a previous plan, Rome had given the GSE the 4 billion euros to buy gas and then sell it to companies before the end of this year, repaying the Treasury with the proceeds. Due to falling gas prices, the government is now saying the GSE can keep the gas for its stocks and repay the loan next year. The government will also extend concessions to drill between nine and 12 miles off Italy’s Adriatic coast, extracting up to 15 billion cubic meters of gas over a 10-year period. Rome plans to continue its expansionary policies in 2023, aiming for a budget deficit of 4.5% of gross domestic product compared to a previous estimate of 3.4% made in September.
The fiscal gap is expected to fall to 3% in 2025, the ceiling set by the EU’s Stability Pact before it was suspended. ($1 = 1.0041 euros)