Italy Approves 2025 Budget Focused on Deficit Reduction and Tax Cuts

Prime Minister Giorgia Meloni's budget aims to meet EU deficit targets while facing criticism over austerity measures and underfunded social services.

• The Italian Senate approved the 2025 budget, which includes €30 billion in tax cuts and social security contributions, by a vote of 108 to 63.
• The budget seeks to lower Italy’s fiscal deficit to 3.3% of GDP in 2025, with a commitment to meet the EU’s 3% ceiling by 2026, following pressure from Brussels.
• Key measures include tax cuts for low- and middle-income earners, a €1,000 bonus for parents of newborns, and limited increases in healthcare spending.
• Critics argue the budget prioritizes political projects, such as a €15 billion bridge to Sicily, over essential services like education, healthcare, and public transport.
• Italy’s economic challenges include slowing growth, high public debt projected to rise to 137.8% of GDP by 2026, and slower-than-expected disbursement of EU recovery funds.

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POLITICO Associated Press