|  NEWS

Italy is preparing a new €13 billion stimulus package to cope with surging electricity, gas and petrol costs.

This is according to a statement by deputy Economy Minister Laura Castelli.

This initiative, which follows on from €33 billion already budgeted since the beginning of the year, is likely to be one of the last key acts by Prime Minister Mario Draghi, following his resignation last week, paving the way for a snap election on 25th September.

After leading a broad coalition for close to 18 months, Draghi resigned for the second time in a week last Thursday after his previous attempt was rejected by President Sergio Mattarella, who asked him to remain in the role as a caretaker leader.

“We must deal with the emergencies related to the pandemic, the war in Ukraine, inflation and the cost of energy,” Draghi told his cabinet colleagues at the time.

Among some of the measures being considered, the Italian government may make consumer staples such as bread and pasta temporarily exempt from VAT sales tax, according to the deputy Economy Minister.

Other measures include subsidising energy supplies for low-income households as well as energy-intensive businesses, Castelli went on to say.

The stimulus package will be financed by higher revenues or savings elsewhere in the government’s budget, thereby not impacting the public deficit, Reuters news agency reports.

Last week Mario Draghi said during a speech to the upper house that a new package of measures would be passed to help counter the effect of increasing prices.

In June, Italy’s EU-harmonised consumer prices index (HICP) registered 8.5%, a rise from May’s figure of 7.3%. Whereas core inflation recorded a 3.8% increase year-on-year on June’s HICP index, compared to 3.2% in May.

“Inflation has never been so high since 1986. This is a phenomenon that greatly erodes the purchasing power of Italians,” Castelli went on to add.
 

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