Italy to boost stimulus spending, energy security

Rome: Italy will approve a package of measures worth more than 9 billion euros ($8.96 billion) on Thursday to lower energy prices, increase gas output and preserve stocks ahead of the winter, a draft government decree showed.

The measures will drive up this year’s budget deficit to 5.6% of gross domestic output from 5.1% previously forecast, according to the Treasury’s annual Economic and Financial Document (DEF) published last week.

More than half the money will be used to extend to the end of the year tax breaks and subsidies for energy-intensive firms and poor households that were introduced by the previous government and funded until November.

A cut in excise duties on petrol due to expire on Nov. 18 will be extended to the end of December.

Among new measures, firms will be able to settle energy bills in instalments under a scheme which includes a state guarantee in case of default on two payments, the draft shows. The guarantee will be provided by public credit export agency SACE.

The state will also forego taxation on fringe benefits paid to employees to help them with their energy bills, to the tune of 3,000 euros per worker.

On energy security, the package will commit 4 billion euros to boost gas storage ahead of the winter by allowing state-owned Gestore dei Servizi Energetici (GSE) to keep some strategic stockpiles acquired in the second half of this year.