Italy adopts a modest budget for 2026.

January 3, 2026
libyawire
Economy
0

On Tuesday, after weeks of debate, the Italian parliament approved a modest budget for 2026, characterized by fiscal prudence and contributions from banks.

The Prime Minister, who heads a far-right coalition government, stated that the budget is “serious and responsible, placing limited resources at the service of Rome’s priorities: families, employment, businesses, and healthcare.”

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The budget measures include tax cuts of nine billion euros over three years and a reduction in the tax rate for those with annual incomes between 28,000 and 50,000 euros.

37,000 euros per year was the average wage in 2022
According to the latest figures from the national statistics office, the average gross wage in Italy exceeded 37,000 euros per year in 2022.

The Secretary-General of the Democratic Party (center-left) said: “This is an austerity budget riddled with flaws that benefits the wealthier more and does not stimulate growth.”

The Prime Minister has been in power in Italy for three years, and her government has helped stabilize the eurozone’s third-largest economy.

However, the rising cost of living is burdening Italians, while growth is expected to reach 0.7% of GDP in 2026.

Italy remains burdened by debt, but the government hopes to reduce the deficit to 2.8% in 2026, placing it below the 3% ceiling set by the European Union.

Achieving this goal is possible thanks to funds from the EU’s massive post-COVID recovery plan, under which Italy has so far received 153.2 billion euros in grants and loans.

The budget includes a plan to increase contributions from banks and insurance companies, reaching 11 billion euros by 2028, along with additional taxes on diesel fuel and cigarettes.

Italy

Italy is a country in Southern Europe with a rich cultural history that dates back to the Roman Empire, which was one of the largest and most influential civilizations of antiquity. It later became the birthplace of the Renaissance, a period of immense artistic and intellectual achievement centered in cities like Florence and Rome. Today, Italy is renowned for its historic landmarks, artistic treasures, and profound influence on Western culture, law, and cuisine.

Rome

Rome is the historic capital of Italy, founded according to legend in 753 BC, and it grew to become the center of the vast Roman Empire. The city is famed for its ancient ruins like the Colosseum and Roman Forum, as well as its profound influence on Western law, government, and culture.

European Union

The European Union (EU) is a political and economic union of 27 European countries, founded after World War II to foster economic cooperation and prevent future conflict. It has evolved from the European Coal and Steel Community in 1951 into a major supranational entity with a single market, a common currency (the euro) used by 20 member states, and shared policies on issues ranging from trade to the environment.

eurozone

The Eurozone is an economic and monetary union of European Union member states that have adopted the euro as their common currency. It was established in 1999 with 11 founding members, aiming to foster economic integration, stability, and growth across the continent. Its history is closely tied to the broader project of European integration following World War II.