Italy turns to banks for €3.5b, no tax hikes

Italy’s Prime Minister Giorgia Meloni’s cabinet has unveiled a plan to tap the country’s banks and insurers for €3.5 billion to finance healthcare and aid for vulnerable citizens while maintaining a pledge of no new taxes for individuals.

The announcement follows weeks of debate on how to balance election promises with fiscal discipline.

Finance Minister Giancarlo Giorgetti, who is leading the effort, emphasised that the financial sector’s contribution is part of a broader €30 billion budget package aimed at reducing Italy’s deficit and boosting healthcare, defence, and support for low-income households.

The budget, which needs approval from the European Union and Italian parliament, comes as Italy faces pressure to bring its deficit below the EU’s 3 per cent limit by 2026.

Despite past challenges in taxing banks, the government is working closely with the Italian Banking Association to manage potential fallout.