Italy approves new $14 billion anti-inflation bailout

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  • Italy offers credit guarantees for companies hit by the energy crisis
  • The new €150 bonus goes to 22 million employees and pensioners
  • Financing without increasing borrowing

ROME, Sept 16 (Reuters) – Italy on Friday approved a new aid package worth around 14 billion euros ($14 billion) to protect businesses and families from rising energy bills and consumer prices, government officials told Reuters.

What is likely to be the last major law by Prime Minister Mario Draghi before the September 25 general election comes on top of the roughly €52 billion budgeted since January to ease Italy’s energy crisis.

Draghi and his economy and energy ministers will unveil the measures in a press conference scheduled at 1315 GMT.

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The program will be funded by higher sales tax receipts from rising electricity and gas bills and other government budget adjustments, without increasing borrowing, government officials told Reuters.

Draghi has dismissed pressure from multiple parties to increase this year’s budget deficit above the target of 5.6% of national production set in April.

Rome plans to introduce a new system of state guarantees to help companies facing liquidity problems due to sky-high electricity and gas prices, Draghi’s office said.

A draft submitted to Reuters showed that the state export agency SACE would offer free guarantees on loans at an interest rate no higher than the interest rate paid on government bonds of the same maturity.

Funding applies to energy bills issued in the final quarter of 2022 as per the draft.

In addition to a series of measures, the program provides a one-time bonus of EUR 150 for 22 million employees and pensioners with an annual income of less than EUR 20,000.

Rome also plans to increase and extend through the end of the year some tax breaks that reduce electricity and gas bills for businesses.

The package extends through November to a cut in excise duties on fuel at the pump, which currently expires on October 17. Hospitals are to receive 400 million euros to help pay energy bills.

($1 = 1.0019 euros)

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Reporting by Giuseppe Fonte, editing by Gianluca Semeraro and Valentina Za

Our standards: The Thomson Reuters Trust Principles.

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