Draghi government approves 14 billion euros in energy aid

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(Bloomberg) – Italy’s cabinet has approved a 14 billion euro ($14 billion) energy aid package to help companies squeezed by rising costs, Prime Minister Mario Draghi’s last act ahead of the general election of the next week.

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“No additional borrowing will be needed as we will use the extra tax receipts from the last few months which have been boosted by rising inflation and growth,” Draghi told reporters at a news conference in Rome on Friday.

The measures include credits that businesses can use from October on their tax bill ranging from 25% to 40% of their energy costs, depending on their needs. In the meantime, the current credit system will be extended.

So far, Italy has spent around 66 billion euros in 8 different packages to ensure that families and citizens are protected from the worst of the energy and price crisis, all without requesting additional borrowing from Parliament, Finance Minister Daniele Franco said at the press conference. .

He added that the Italian economy is holding up and will not be in recession in the third quarter. The deficit will remain at 5.6% as expected, Franco said.

national vote

Voters will head to the polls on September 25 just as soaring energy costs and rising interest rates cast a shadow over the coming winter.

Other items approved on Friday include state guarantees on loans requested by companies with liquidity problems due to rising spending and an extension until November of a fuel tax break aimed at reducing the cost at the pump.

The government has also earmarked funds for the agricultural sector, schools, sports and culture, public transport and the health sector.

Such measures should bind Italy until a new government takes power after the vote. In addition to facing international tensions, the winners of the upcoming elections will also face domestic struggles with high debt, low growth, an aging population and stubborn North-South disparities.

Italy’s Giorgia Meloni brothers, whose right-wing coalition led polls before a blackout began earlier this week, have pledged to keep the country’s finances on track. It will also have to ensure that the cash targets of the European Union Recovery Fund continue to be met, allowing Italy to receive almost 200 billion euros in grants and loans allocated to it in the next years.

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