Italian parliament adopts 2025 budget

The Italian parliament finally passed the 2025 budget on Saturday.

The financial plans of the right-wing three-party coalition of Prime Minister Giorgia Meloni, with a total volume of €30 billion ($31.3 billion), was also approved by the upper house of parliament in Rome, the Senate. The Chamber of Deputies gave its approval shortly before Christmas.

The budget provides for a reduction in Italy’s national deficit to 3.3% of the gross domestic product (GDP) next year. This year, it will probably still be around 3.8%. The European Union’s stability criteria allow for just 3%. Italy is one of the most indebted countries in the world.

The EU has repeatedly called on Rome to finally start reducing its deficit after huge overruns in previous years. The Meloni government has at least committed to pushing the new debt below the 3% mark in 2026, though it is uncertain whether this can be achieved.

The plans are complicated by costly state subsidies for energy-efficient construction, known as the “super bonus.”

In addition, the national statistics office has recently dampened growth prospects: Italy is now expected to see growth of just 0.5% this year – only half as much as was forecast in the summer.

Nevertheless, the recently approved budget includes tax breaks for low earners. Those who earn less than €28,000 per year will pay 23% income tax instead of 25%.

In recent weeks, Italy’s trade unions have repeatedly mobilized against the budget with strikes because they consider it to be socially unjust.

Italy has been ruled by a right-wing coalition since autumn 2022. The largest governing party is Meloni’s far-right Brothers of Italy, with the two smaller partners being the far-right League and the conservative Forza Italia.