On Friday, the Senate granted approval to the government’s 2024 budget bill, with 109 votes in favour, 72 against, and two abstentions.
The package now proceeds to the Lower House for the final endorsement, scheduled for December 29. It must secure approval before the year’s end. The overall value of the package, including a related tax reform that consolidates the two lowest Irpef income-tax bands into three, amounts to approximately €28billion.
Nearly half of the measures in the package are financed through an additional deficit. Notable provisions include maintaining a 6% reduction in the labour-tax wedge for those earning up to €35,000 and a 7% reduction for those earning up to €25,000.
The government asserts that these measures translate to an average increase of around €100 per month for the pay packets of 14 million workers.
Opposition says package is “minimalist”
However, opposition parties criticise the package as “minimalist” and argue that it fails to stimulate economic growth. Trade unions have expressed their disappointment through a series of strikes. Furthermore, industry association Confindustria deems the budget insufficient for supporting Italian businesses, labelling the 2024 budget bill ‘incomplete’.
In response, Premier Giorgia Meloni’s government defends its approach, saying business investment is addressed through the National Recovery and Resilience Plan (NRRP). This plan, funded by almost €200billion in EU grants and low-interest loans, aims to make the Italian economy more environmentally friendly and modern.
Minister of Economy Giancarlo Giorgetti acknowledged the complexity of the economic and geopolitical landscape, especially heightened by recent events in the Middle East. He also highlighted the need to find a compromise within the government, navigating various demands and internal and external budgetary constraints.
“The budget was prepared in an extremely complicated scenario, in which the uncertainty linked to recent events in the Middle East comes on top of the difficulties that have long characterised the economic and geopolitical situation,” Giorgetti said.
Despite the challenges, Giorgetti believes the budget was crafted as effectively as possible.
“A compromise between the different demands and the internal and external budgetary constraints had to be found within the executive. It was not an easy job, but I think it was done as well as possible”.