© Reuters. FILE PHOTO: Italy’s Prime Minister Mario Draghi looks on during a news conference after signing an accord with French President Emmanuel Macron to try to tilt the balance of power in Europe, at Villa Madama in Rome, Italy, November 26, 2021. REUTERS/Remo
By Giuseppe Fonte and Gavin Jones
ROME (Reuters) -Italy is considering increasing by some 2 billion euros ($2.27 billion) funds set aside to curb energy prices next year, using resources previously planned to cut income and business taxes, three government sources said.
With international energy prices soaring, Mario Draghi’s government has already spent more than 4 billion euros this year to try to rein in utility bills by compensating companies that agree to cap their tariffs.
Draghi set aside a further 2 billion euros for next year in the 2022 budget approved by cabinet in October, but with energy cost pressures continuing to drive consumer price inflation, the government is now considering doubling that sum.
The money can be found because the government will use less than the 8 billion euros earmarked in the budget to cut income and business taxes, the sources said, asking not to be named because of the sensitivity of the matter.
With the Treasury aiming to trim the budget deficit to 5.6% of gross domestic product in 2022 from the 9.4% targeted this year, resources are limited.
The cabinet is likely to discuss the matter on Friday, one of the sources said.
The tax cut will focus mainly on income tax (IRPEF), reducing the number of tax rates to four from five, with the largest benefit going to middle-income tax-payers earning between 28,000 and 55,000 euros per year.
According to a preliminary deal reached among the ruling parties, the first tax band on annual income between 8,000 and 15,000 euros will be left at 23%. The second band, between 15,000 and 28,000 euros, will be lowered to 25% from 27%.
The third band, on income from 28,000 to 55,000 euros will get a more substantial cut to 35% from 38%.
The fourth band, on income from 55,000 to 75,000 euros will rise from 41% to 43%. This is the rate that is currently applied on income above 75,000 euros, effectively cancelling the fifth income tax band.
Draghi has been meeting delegations this week from parties in his national unity coalition to hammer out the details of the tax reform.
($1 = 0.8828 euros)
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Italy says can exceed 3.1% growth target for 2022 despite energy prices
© Reuters. FILE PHOTO: People walk along the Galleria Vittorio Emanuele II shopping mall in Milan, August 25, 2015. REUTERS/Flavio Lo Scalzo
ROME (Reuters) – Italy’s Treasury said the country’s economy could grow this year by at least as much as Rome’s official target of 3.1% set in April, despite the negative impact of surging energy prices.
Italy grew 0.1% in the first quarter from the previous three months, national statistics bureau ISTAT said last month, revising up a preliminary estimate of a 0.2% contraction.
This left Italy with so-called “carryover” growth of 2.6% this year, assuming gross domestic product was flat in the remaining three quarters, ISTAT said.
Announcing on Monday the bond issuance programme for the third quarter, the Treasury said it expected growth to accelerate in the second quarter, compared with the first three months.
This still makes it plausible to reach or exceed the 2022 growth target of 3.1%, it said in its debt issuance report.
Prime Minister Mario Draghi’s government in April revised down its 2022 economic growth forecast to 3.1% from a 4.7% projection made last September.
The government has budgeted since January more than 33 billion euros ($34.90 billion) to soften the impact of sky-high electricity, gas and petrol costs.
($1 = 0.9456 euros)
French consumer confidence falls more than expected in June
© Reuters. A woman shops at a fruit and vegetables shop in Paris, France, June 10, 2022. REUTERS/Sarah Meyssonnier
PARIS (Reuters) – French consumer confidence fell more than expected in June, hitting a near nine-year low as concerns about the economic outlook surged in the face of high inflation and political uncertainty, a survey showed on Tuesday.
The INSEE official statistics agency said its consumer confidence index fell to 82 in June from 85 in May and the lowest level since July 2013.
A Reuters poll of 14 economists had an average forecast of 84 with the lowest estimate for 83.
Although households’ concerns about future inflation remained well above the long-term average, they eased in June for the third month in a row.
However, household sentiment about the general economic outlook continued to worsen, falling to the lowest level since May 2020 when France was in the second month of its first and most strict COVID-19 lockdown.
While surging inflation has stressed households in recent months, France’s political situation has added to uncertainty about the economic outlook since President Emmanuel Macron’s party lost its ruling majority in legislative elections this month.
Peru truckers, farmers to strike over fuel and fertilizer costs
© Reuters. FILE PHOTO: People walk next to parked trucks during a national transportation strike against fuel prices, in Lima, Peru March 18, 2021. REUTERS/Angela Ponce/File Photo
By Marco Aquino
LIMA (Reuters) – Peru’s truckers and some farm groups will go on strike on Monday after failing to reach agreements with the government seeking measures to reduce the impact of steep global price rises of fuel and fertilizer, sector leaders said on Sunday.
Union leaders met on Friday and Saturday with government representatives, with demands including considering freight transport a “public service” that would reduce costs and curb competition from truckers from neighbor countries.
“We are firm in plans to strike with all our bases nationwide,” the leader of the heavy load haulage and drivers union Marlon Milla told radio station RPP. The union has 400,000 cargo transport units in 14 of the 25 regions of the country.
High global fuel prices linked to Russia’s invasion of Ukraine have stoked unrest in Peru, the world’s No. 2 copper producer, while shortages of fertilizer have raised fears over food supply with the government struggling to secure shipments.
The government of leftist President Pedro Castillo, who has seen his popularity tumble since taking office last year, has taken measures to curb the rising cost of living, but the annual inflation rate remains at around 8%, its highest level in 24 years.
Some farming unions also announced strikes on Monday, in protest at the rise in fertilizer prices and shortages.
Latin American leaders are grappling to bring down spiraling prices despite major interest rate hikes. Trucking protests over fuel costs have hit Argentina while Ecuador is being roiled by protests in part linked to gas prices. [L4N2YB27W]
“The dialogue has not been exhausted, we are in a permanent session of ministers to avoid protest,” Justice Minister Félix Chero told reporters on Sunday. The government is offering subsidies for road tolls and fertilizer costs.
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