Italy

Italy’s far-right-led government on Monday approved a budget for next year that aims to bolster public health services, encourage families to have more children and put more money in the pockets of low- and medium-wage earners, the Associated Press reported. Premier Giorgia Meloni said the 24 billion-euro ($25 billion) budget, which includes 5 billion in spending cuts, is in line with the government’s priorities. She described it as both “serious” and “realistic," even as Italy faces an expected increase of 13 billion euros in payments to service its public debt as interest rates increase.

KKR & Co. is set to submit a binding offer for Telecom Italia SpA’s phone network, in what promises to be a game-changing deal for the ex-monopolist looking to slash its massive debt pile, Bloomberg News reported. Telecom Italia expects the final bid from the US private equity firm, following months of negotiations, by the end of this weekend at the latest, the people said, in line with a company deadline. KKR has valued the grid at as much as €23 billion ($24 billion).

Italy intends to scale back its current set of state guarantees and create a new scheme to boost private investment in strategic infrastructure, Economy Minister Giancarlo Giorgetti said on Tuesday, Reuters reported. The move is part of Rome's efforts to phase out the expansionary policies adopted since 2020 in the wake of the COVID-19 pandemic and the energy crisis exacerbated by Moscow's invasion of Ukraine. As of Dec. 31, 2022, state guarantees amounted to 15.8% of Italy's gross domestic product (GDP), Treasury data showed in April, marginally below the 16.1% of 2021.

The cabinet of Italian Prime Minister Giorgia Meloni approved a fiscal aid package worth about €1.3 billion ($1.4 billion), including help for households coping with soaring energy bills, a government official said, Bloomberg News reported. Meloni’s right-wing government will extend tax breaks and discounts on electricity and gas bills and help low-income families pay for fuel and public transportation, the official said.

Italian Prime Minister Giorgia Meloni said that a windfall tax on banks’ profits, which has worried investors, could be tweaked as long as the state receives the same expected inflow, Bloomberg News reported. “If we will need to amend the tax on banks, we will do it as long as the inflows will be unchanged,” Meloni told RAI1 television, adding that the value of expected receipts is just under €3 billion ($3.2 billion). Meloni commented on the tax on a popular TV show after the European Central Bank warned of potential negative side effects from the controversial levy.

Italy is preparing to cancel its controversial membership in China’s Belt and Road infrastructure initiative, engaging in an elaborate diplomatic dance to avoid angering Beijing and triggering retaliation against Italian businesses, the Wall Street Journal reported. Italian Foreign Minister Antonio Tajani held talks in Beijing on Sunday and Monday to facilitate as smooth an exit as possible from the initiative while laying the groundwork for alternative economic deals with China.

Prime Minister Giorgia Meloni’s coalition is considering selling minority stakes in selected state-owned companies to boost Italy’s public finances, Bloomberg News reported. Government ministers are evaluating the disposal of some assets, including a stake in the state railway, while still retaining control over the businesses, according to people familiar with the discussions, Bloomberg News reported.

Prime Minister Giorgia Meloni on Wednesday defended the decision to impose a surprise windfall tax on profits at Italy's banks after the government watered down the plan following a market rout, Reuters reported. The economy ministry clarified late on Tuesday that the 40% windfall tax, a one-off measure which targets gains from banks' higher interest rates, would not amount to more than 0.1% of their total assets.

Italian bank stocks plunged Tuesday after the Cabinet approved a proposal to apply a 40% tax on some bank profits this year to help consumers and businesses cope with higher borrowing costs, the Associated Press reported. Transport Minister Matteo Salvini announced the tax at a Monday evening press conference, saying it was a measure of “social equity” to make up for a series of interest rate hikes from the European Central Bank.

Italy's biggest telecoms company Telecom Italia (TIM) said on Friday it received two new offers for its landline grid, as companies bid to resolve the impasse over the asset's sale process, Reuters reported. U.S. fund KKR and separately a rival consortium comprising state lender CDP and Australian fund Macquarie submitted bids for Telecom Italia's network, according to a statement. Debt-crippled TIM is seeking improved offers for its most valuable asset after having assessed as not yet adequate the proposals received in May.