Tuesday

17th Oct 2017

Italy approves fresh multi-billion-euro stimulus plan

  • The size of Italian stimulus plans has been constrained by high public debt levels and rising budget deficits (Photo: EUobserver)

Italian ministers approved a new stimulus package on Friday (26 June) - reported to be in the region of €4.5 billion – as the government attempts to stave off a further slide in economic activity this year.

Measures under the new plan - whose total size has yet to be finalised - include tax incentives for businesses that re-invest profits in new machinery and refrain from cutting workers.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

The government also intends to reduce costs for gas utilities in order that savings can be passed onto consumers.

The new stimulus comes as forecasters predict the Italian economy will contract by a greater margin than initially anticipated this year.

Earlier this month, the Paris-based Organisation for Economic Co-operation and Development cut its growth forecast for Italy for 2009 to a contraction of 5.3 percent, a significant deterioration from a March forecast of a 4.3 percent contraction.

Italian industry minister Claudio Scajola said in a statement after the cabinet meeting that the government had decided to "intensify actions against the crisis".

As EU member states announced initial stimulus plans last winter to tackle the crisis, the Italian government faced criticism over the modest size of its proposed package.

The country's prime minister, Silvio Berlusconi, outlined a stimulus package totalling €80 billion last November, but critics pointed to the fact that only €5 billion consisted of new funding.

High national debt levels and rising budget deficits have constrained the Italian government's ability to roll out greater spending packages.

The OECD predicts the country's debt as a percent of GDP will come close to 120 percent in 2010, with the budget deficit set to reach 6 percent.

Second French stimulus?

In France, Prime Minister François Fillon insisted on Sunday that funds collected through the issuance of a new national savings bond would not be used to finance day-to-day costs but would instead go to specific sectors that would drive financial and social benefits in the future.

These included spending to safeguard the country's environment, universities and industrial competitiveness, said Mr Fillon.

But he insisted the spending of funds gathered from the new bond issuance plan – announced by President Nicolas Sarkozy in a speech to the French parliament last week – did not constitute a "second stimulus plan".

"[The fund] will serve to outline our vision for France, that is to say, a post-financial crisis France," he said after a government meeting in the premier's head office.

The government will launch a consultation period this week on the setting up of the new bond scheme to raise extra funds, expected to last several months before it is finally put into place next year.

A recent poll by market research company Opinion Way showed 56 percent of the French population oppose the government's bond plan and that 82 percent do not intend to subscribe to it.

Analysis

Juncker's euro-push could risk unity, warns eastern flank

The EU Commission chief hopes that as Emmanuel Macron pushes for euro area countries to integrate further creating a multi-speed Europe, central European members will be more inclined to join the single currency. Are they?

News in Brief

  1. EU to keep 'Dieselgate' letter secret
  2. No deal yet on Mediterranean alliance for EU agencies
  3. EU Commission condemns Maltese journalist's murder
  4. Poland denies wrongdoing over forest logging
  5. Risk to asylum kids in EU increasing, says charity
  6. Schroeder warns of Turkey and Russia drifting towards China
  7. EU parliament wants equal pay for posted workers
  8. Catalan independence leaders taken into custody

Stakeholders' Highlights

  1. EU2017EENorth Korea Leaves Europe No Choice, Says Estonian Foreign Minister Sven Mikser
  2. Mission of China to the EUZhang Ming Appointed New Ambassador of the Mission of China to the EU
  3. International Partnership for Human RightsEU Should Seek Concrete Commitments From Azerbaijan at Human Rights Dialogue
  4. European Jewish CongressEJC Calls for New Austrian Government to Exclude Extremist Freedom Party
  5. CES - Silicones EuropeIn Healthcare, Silicones Are the Frontrunner. And That's a Good Thing!
  6. EU2017EEEuropean Space Week 2017 in Tallinn from November 3-9. Register Now!
  7. European Entrepreneurs CEA-PMEMobiliseSME Exchange Programme Open Doors for 400 Companies Across Europe
  8. CECEE-Privacy Regulation – Hands off M2M Communication!
  9. ILGA-EuropeHealth4LGBTI: Reducing Health Inequalities Experienced by LGBTI People
  10. EU2017EEEHealth: A Tool for More Equal Health
  11. Mission of China to the EUChina-EU Tourism a Key Driver for Job Creation and Enhanced Competitiveness
  12. CECENon-Harmonised Homologation of Mobile Machinery Costs € 90 Million per Year

Latest News

  1. Nepal troops arrive in Libya to guard UN refugee agency
  2. Is Banking Authority HQ the Brexit 'booby prize'?
  3. EU-Russia trade bouncing back - despite sanctions
  4. No sign of Brexit speed-up after May-Juncker dinner
  5. EU defence strategy 'outsourced' to arms industry
  6. EU privacy rules tilt to industry, NGO says
  7. Malta in shock after car bomb kills crusading journalist
  8. Spanish and Catalan leaders continue stand-off