According to government sources, Italy aims to adopt a fresh assistance package costing around 14.3 billion euros ($14.5 billion) on Thursday to help insulate enterprises and households from rising energy and consumer prices.

The initiative, one of departing Prime Minister Mario Draghi’s last big measures before a national election next month, adds to the 33 billion euros allocated since January to mitigate the effect of sky-high energy, gas, and fuel prices.

According to a draft order seen by Reuters, Rome wanted to prolong current measures aimed at lowering electricity and gas bills for low-income households as well as lowering so-called “system-cost” taxes until the fourth quarter of this year.

Prior to the government’s intervention, the levies accounted for more than 20% of Italian energy bills and were intended to assist support programs ranging from solar power subsidies to nuclear decommissioning.

Among other things, the government will extend a 200 euro bonus given to low and middle-income Italians in July to those who did not previously get it.

A reduction in excise charges on gasoline that was slated to expire on August 21 has been extended until September 20.

According to the proposal, Rome is also contemplating prohibiting energy providers from unilaterally changing electricity and gas supply contracts for families until October.

With tax collections exceeding expectations, money for the package will not increase the public deficit goal, which Rome reaffirmed last week at 5.6 percent of national GDP this year.

A total of 1.6 billion euros will be spent in the second half of this year to reduce the so-called tax wedge, which is the gap between what a company pays and what a worker gets home, with the benefit coming to workers earning less than 35,000 euros per year.

According to the Organization for Economic Cooperation and Development (OECD), the typical single worker in Italy would lose 46.5 percent of his gross wage in taxes and social contributions in 2021, the fifth-highest percentage among a group of 38 industrialized countries.

To strengthen the buying power of the elderly, the government will push forward a 2% revaluation of pensions slated for 2023 to the fourth quarter of 2022, at a cost to the public coffers of roughly 2.4 billion euros.

Source: Reuters

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