Italy’s expanded fiscal spending treats symptoms but not the root cause.

Key measures in the draft include raising next year’s budget deficit to 4.5% of GDP to finance 60% of the draft’s expenditures. Other funding sources include increasing the windfall tax on energy companies; allocating over €21 billion to support households and businesses with electricity and gas bills; earmarking approximately €4.2 billion to raise wages for low-income workers; raising the income threshold for the 15% flat tax on self-employed individuals from €65,000 to €85,000 annually; cutting VAT and sales taxes on certain essential consumer goods—such as baby care products—from 10% to 5%; incentivizing the hiring of women under age 36; tightening the universal basic income program for the unemployed by limiting benefits to a maximum of eight months for able-bodied individuals of working age, and fully phasing out the program effective January 1, 2024; and allowing Italians who have contributed to pension funds for at least 41 years to begin drawing pensions as early as age 62. The draft prioritizes addressing socioeconomic shocks caused by the energy crisis. Since the outbreak of the Ukraine crisis, soaring energy prices have driven inflation sharply upward in Italy. According to data released by Italy’s National Institute of Statistics (ISTAT) in October, the country’s consumer price index (CPI) rose 11.9% year-on-year in October, while energy prices surged 73.2% year-on-year. Compared to 2019 levels, natural gas prices in Italy have risen approximately 776%, electricity generation and transmission/distribution prices 131.5%, gasoline prices 20%, and heating diesel prices 36%. The OECD’s latest Economic Outlook report forecasts Italy’s 2023 GDP growth at just 0.2%, down from its September projection of 0.4%. The report notes that persistently high energy prices are suppressing energy-intensive industries, high inflation is eroding real incomes, rising interest rates are dampening investment, export market growth is slowing, and weakening domestic demand may further push up unemployment. Italy’s increased budget deficit in 2023 will primarily fund energy and inflation subsidies for households and businesses, cuts to personal income tax for low-income groups, and reductions in VAT on selected daily necessities. Sun Yanhong, Director of the European Economic Research Division at the Institute of European Studies, Chinese Academy of Social Sciences, and Secretary-General of the Italian Studies Branch of the China Society for European Studies, told the Economic Daily in an interview: Overall, the budget draft aims to protect households and businesses, with special attention to the poorest and most vulnerable families and individuals—thus helping ease operational pressures on enterprises and uphold social equity. For instance, raising the annual income threshold for the 15% flat tax on self-employed individuals from €65,000 to €85,000—though lower than the €100,000 pledged during the election campaign—still grants most self-employed persons a €20,000 tax-exempt income bracket, which will positively impact their economic conditions. However, given that Italy’s current energy crisis and high inflation stem largely from external shocks triggered by the Ukraine crisis—and considering the persistent supply shortfall and elevated energy prices—while expanding fiscal spending may alleviate socioeconomic pressures to some extent, it cannot fundamentally resolve the crisis.

[Major Foreign Trade News | 0902] Shenzhen Pet Fair and other exhibitions abruptly canceled; Evergreen container fell and sustained damage; multiple countries introduced foreign exchange controls, etc.

MFS Africa’s partners include mobile network operators such as MTN, Airtel, and Orange, as well as remittance service providers including MoneyGram, PayPal, and WorldRemit. Mike Ogbalu, CEO of the Pan-African Payment and Settlement System (PAPSS), stated that intra-African trade accounts for only about 16% of Africa’s total trade. Therefore, Africa needs a simpler, more cost-effective payment system to boost intra-continental transaction volumes. It is understood that PAPSS’s pilot phase has already been rolled out across the West African Monetary Zone, covering Nigeria, Ghana, Liberia, Guinea, The Gambia, and Sierra Leone. Following the pilot’s success, PAPSS plans to launch trials in five additional regions before 2023, sign agreements with central banks across the continent by the end of 2024, and extend coverage to more commercial banks by the end of 2025. PAPSS was launched in 2016. The African Union (AU) states that PAPSS will serve as the primary payment platform for implementing the African Continental Free Trade Area (AfCFTA), becoming a landmark payment system for Africa. ❤ United States U.S. port congestion expected to ease According to media reports, the U.S. Department of Transportation has launched an application-based initiative to share supply chain data. The number of participating enterprises has doubled since its inception, offering hope for alleviating port congestion in the United States. This initiative brings together trucking companies, shipping lines, wholesalers, retailers, and port operators to jointly develop a data application tool enabling users to access real-time supply chain information for specific nodes and regions. Known as the Freight Logistics Optimization Works (FLOW) program, it initially involved 18 companies—including FedEx, UPS, C.H. Robinson, retailers Albertsons and Target, the Ports of Los Angeles and Long Beach, and shipping lines CMA CGM and MSC. U.S. Transportation Secretary Pete Buttigieg noted that the program enables firms to share information, thereby accelerating freight movement and reducing associated costs. Participation has now expanded to 36 companies, including DHL, Maersk, and Samsung. Several indicators suggest global supply chain disruptions are easing. According to Freightos, a global freight forwarding services provider, the cost of a 40-foot standard container has dropped roughly 45% from its peak last autumn. Although the Port of Los Angeles experienced its busiest June in a century, the number of vessels waiting to berth has declined by 75% since the start of the year, and air cargo transit times have also shortened. Additionally, the New York Federal Reserve Bank’s Global Supply Chain Pressure Index shows a 57% decline in July compared to its peak. ❤ Italy Italy plans further hike in energy windfall tax According to an August 30, 2022 report by Italian news outlet askanews.it, Italy’s Minister of Labour stated that, under the state of emergency concerning energy, the government must swiftly adopt measures to assist households and businesses unable to bear soaring energy costs. If necessary, the government should expand the budget deficit and, within legal limits, use the energy windfall tax (extra-profitti) as a revenue source. The government should not rule out raising the current 25% rate further, and should reassess price controls and consider decoupling renewable energy tariffs from natural gas prices.

Italy May Hike Tax on Energy Firms to Fund Budget, Sources Say

Oct 23, 2026

Italy considers raising taxes on energy firms to fund its 2027-2029 budget amid high fuel costs and protests. Eni reported doubled profits and announced dividends despite the government's pressure on the energy sector.

reuters

2026-07-06

Eni Deepens Lithium Push With $225 Million EnergyX Deal in Chile

2026-07-16

Eni CEO Says Energy Industry Shifting Investment to Southeast Asia, Latin America

2026-09-29

Eni's Plenitude Offers 30% Discount on Standard Power, Gas Prices

2026-10-02

Italy's Eni extends fuel discounts to agriculture and fishing sectors

2026-10-23

Italy May Hike Tax on Energy Firms to Fund Budget, Sources Say

Italy May Hike Tax on Energy Firms to Fund Budget, Sources Say

FAQ