Italy talking to banks, energy groups over contribution to 2027 budget

Italy Consults Banks, Energy Companies for 2027 Budget Contributions

Government Discussions on Budget Funding Strategies

By Giuseppe Fonte

ROME, Oct 8 (Reuters) - Italy's government is talking with banks and energy groups over their potential contribution to state finances, Deputy Economy Minister Maurizio Leo said on Thursday, as the government finalises its 2027 budget to be presented next week.

Ongoing Dialogue with Financial Institutions

"The dialogue is always open," Leo told reporters on the sidelines of parliamentary business.

Cooperative Approach with Banks

Leo, a member of Prime Minister Giorgia Meloni's Brothers of Italy party, said the government would take a cooperative approach, meaning it did not want to clash with the affected companies.

 "We're always in favour of dialogue. We don't want to slap people around," he said, referring in particular to banks.

Repeating Last Year's Contribution

"Since we had a contribution last year, let's try to do the same this year," he added.

Budget Challenges and Economic Context

Meloni is seeking ways to fund costly tax cuts for middle-income earners in her last budget before national elections due next year, against a difficult ⁠economic backdrop.

Surging energy prices are driving up inflation, government borrowing costs are climbing, while the public debt is expected to overtake Greece's this year as the ​highest in the 21-nation currency bloc.

Bank Contributions and Tax Measures

The co-ruling League party said banks should contribute up to €3 billion ($3.35 billion).

This figure would be on top of some €12 billion the government already aims to garner from Italy's lenders and insurers through 2028, thanks to a package of measures contained in this year's budget, including a higher tax band for the IRAP corporate tax.

Energy Companies and Windfall Tax Proposals

As for energy companies, leading groups including state-controlled Eni last week announced price caps to help Meloni curb fuel prices, a move widely seen as an attempt to deter the government from imposing a windfall tax.

EU-Wide and Domestic Tax Initiatives

The finance ministers of Germany, Spain, Portugal, Italy, Poland and Austria are pushing for an EU-wide windfall tax on energy companies, warning that consumers are facing one of the biggest oil supply shocks in decades which is fuelling voter discontent over rising living costs.

Economy Minister Giancarlo Giorgetti has not ruled out introducing a domestic windfall tax rather than waiting for a joint initiative. ($1 = 0.8947 euros)

(Editing by Keith Weir)