Germany After long debates: Italy's budget clears first hurdle
Shortly before the turn of the year, the 2026 budget of Prime Minister Giorgia Meloni's right-wing three-party coalition has cleared its first parliamentary hurdle in Italy.
23.12.2025, 17:28
SDA
One day before the Christmas break, the Senate in Rome approved the budget law. This was preceded by weeks of debates and adjustments; the government had combined a maxi-amendment with a vote of confidence.
Final approval by the Chamber of Deputies is still pending. The law may be discussed there on December 30 in order to come into force just in time for January 1.
Below the three percent mark
The budget law provides for new expenditure and tax measures amounting to around 22 billion euros (20.5 billion Swiss francs). Meloni wants to use the budget to reduce new debt for 2026 to below three percent of gross domestic product (GDP), as stipulated by the European stability criteria.
Italy is one of the most indebted countries in Europe. The EU had repeatedly called on Rome to start reducing its deficit. The Meloni government had pledged to implement this in 2026.
Tax relief and aid for companies
The changes include investment incentives for companies and tax relief for employees. For example, the rate for income between around 28,000 and 50,000 euros is to fall from 35% to 33%. The retirement age is to rise gradually in some cases. Measures relating to the taxation of banks and insurance companies are to contribute to financing the budget.
More money is to flow into defense. In addition, the gold reserves of the Banca d'Italia are to be considered the property of the Italian people. It was said that the measure, which is being closely monitored by the European Central Bank, is a symbolic act.
Criticism from the opposition and trade unions
The opposition and trade unions had sharply criticized the budget plan launched by the cabinet in October. The social democratic Partito Democratico (PD) party criticized the government for having promised more welfare and now implementing the opposite.
The trade unions had mobilized against the plans with large-scale strikes. Italy's largest trade union confederation, the CGIL, had declared that the plans would worsen the living and working conditions of many people and affect workers, pensioners, young people and women in particular. Key areas such as healthcare, schools, care for the elderly, housing and local transport would be inadequately addressed.
