Italy's government earmarks $30 billion for energy aid package

ROME

The new Italian far-right government led by Giorgia Meloni approved a financial plan Friday that will set aside around €30 billion ($30 billion) by 2023 to reduce the effects of record energy costs on families and businesses.

At a news conference following a Cabinet meeting that discussed the measures, Meloni explained that additional resources devoted to tackling the energy crisis will be raised by lifting the 2023 budget deficit to 4.5% of gross domestic product from the 3.4% previously projected.

The premier said the move would free up resources to finance measures worth up to €23 billion by the end of 2023. About €9.5 billion will be available next week to fund a decree that will swiftly address the energy emergency, she added.

Italy’s public finances this year have been stronger than expected, giving the newly-appointed government -- closely watched by European partners and institutions -- more fiscal leeway to support the struggling economy while keeping the deficit under control.

Despite an aggressive electoral campaign -- based on promises of higher pensions and tax cuts -- since the start of her mandate, Meloni has pledged to devote most of the available funds to address the crisis.

Her Cabinet approved the annual Economic and Financial Document on Friday that represents the preliminary framework for the 2023 budget law, which needs to be sent to Brussels and then approved in parliament by the end of the year.

The government raised Italy's growth forecast for 2022 to 3.7% from a previous 3.3%, while leaving the 2023 forecast unchanged at 0.6%.

Economy Minister Giancarlo Giorgetti said the budget approach was “realistic and sustainable.”

He added, however, that recession risks were still looming in Europe and could also touch Italy.

“We will be ready to face them,” he added.