Italy adopts three-week extension of excise duty cut on fuels
Government Measures to Address Rising Energy Costs
By Giuseppe Fonte and Angelo Amante
ROME, April 30 (Reuters) - Italy on Thursday lengthened for three weeks a cut in excise duties on fuels to help families and firms cope with rising energy costs, with the extension focusing more on diesel than on petrol.
Details of the Excise Duty Extension
In view of the fact that diesel prices have risen significantly more than petrol, the government said it was keeping in place a 0.2 euro-per-litre cut on diesel duties, while the reduction for petrol will be trimmed to 0.05 euros.
Price Increases and Government Response
"Petrol has risen by 6% and diesel by 24%," Meloni told a news conference after a cabinet meeting to approve the measure.
Previous Spending and Economic Impact
Italy has already spent around 700 million euros ($820.61 million) to cut excise duties on both fuels for just over 40 days until May 1, as the economy struggles with the fallout of the U.S.-Israel war on Iran, which began on February 28.
Italian consumer price inflation surged by almost 3% year-on-year in April, preliminary data by statistics bureau ISTAT showed on Thursday.
Additional Government Initiatives
Real Estate Investment for Low-Income Citizens
The cabinet also approved a separate package of measures to invest up to 10 billion euros in real estate projects for low-income people over the next decade, aiming to make available some 100,000 houses.
BUDGET LEEWAY
Calls for EU Budget Flexibility
During a debate in parliament on the government's multi-year financial plan earlier on Thursday, Economy Minister Giancarlo Giorgetti reiterated Italy's calls for the European Union to grant greater budget flexibility for energy-related spending.
Statements from Economy Minister Giorgetti
"It is very difficult to defend (an EU) clause that provides for budget leeway for defence and rules out aid measures to respond to the energy crisis," he said.
Italy's Request to the European Commission
Italy wants the European Commission to allow member states to soften energy costs by using budget leeway which is explicitly envisaged for defence and security spending.
EU 'National Escape Clause' and Defence Spending
Under a so-called 'National escape clause', the EU allows countries to exceed the bloc's budget deficit limits in the case of exceptionally averse economic circumstances, or to increase their defence spending.
In the case of defence spending, the budget flexibility is available for four years between 2025 and 2028, with an increase in the deficit that must not exceed 1.5% of national output per year.
($1 = 0.8530 euros)
(Editing by Gavin Jones)
