23.5 billion budget: 5 from the banks for family and welfare measures

The budgetary policy document sent to Brussels and to Parliament sets out the initial list of measures contained in the 2027 Budget Bill.

The list of measures in the budget will begin with the chapter dedicated to to families and social spending, to which 5 billion will be allocated. Defence comes in second place with 4.5 billion (the remaining 2.5 billion under the clause will be allocated to expenditure already provided for in the budget estimates), whilst the top three is rounded off by measures in favour of businesses at 3.4 billion euros.

The bulk of the funds will come primarily from the banks and the financial sector, from which the government intends to request a further 5 billion (10.5 over three years). Ministries and the public administration will also be called upon to dig deep into their pockets with a new round of spending reviews totalling 1.2 billion, whilst the figure allocated to the gaming sector amounts to just over 700 million (to be repeated in 2028 and on a smaller scale in 2029).

The framework for the Budget Bill, which is expected to be discussed by the Council of Ministers as early as the end of next week so that it can be submitted to Parliament by 28 October, is set out in the Budget Policy Document (DPB), which was submitted overnight to the European Commission and the European Parliament. The list of revenue and expenditure, the document itself notes, is not final because ‘the precise definition of the measures will take account of the outcomes of the ongoing discussions with the European authorities’. The outlook, in any case, does not appear set to undergo any profound changes, as no revolutionary developments are likely to emerge from the negotiations with the Commission. At stake, as stated in the Draft Budgetary Plan (DBP), is in particular the ‘more precise definition of the scope for triggering the national safeguard clause’, in a summary which therefore does not even mention the request for flexibility in the application of the expenditure rule.

Judging by the snapshot provided by the Draft Budget Bill – the budget which, in the pre-election dreams of so many politicians, was supposed to sail on the winds of ‘hidden reserves’ earmarked for populist measures – the reality is, in fact, a rather lean affair. Once the 14.4 billion in extra deficit spending on energy and defence has been deducted, only 9 billion remains in the ordinary section of the Budget Bill – a figure that points to one of the most modest budgets in the history of the Republic. Its core will be the ‘protection of households’ purchasing power, with particular attention to the most vulnerable. Help for the elderly and those with health problems, as previewed in recent days by *Il Sole 24 Ore*, therefore appears to be on the horizon. The draft budget framework, however, does not currently include the budgetary scope for an income tax cut for the middle class, with the threshold for the 33 per cent tax rate rising from 50 to 60mial euro; this measure therefore appears once again to be deferred until better times. Another key chapter will be that of ‘measures relating to energy security’, which will also include investment in the rail network and energy efficiency improvements to public buildings, starting with schools, hospitals, universities and sports facilities. Support to tackle high energy prices will also be put in place for businesses, as part of a package that will include grants for solar panels, the promotion of biomethane and the conversion of existing biogas plants.