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Italy has at least $6.2 bln for new anti-inflation package

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ROME — Italy plans to spend at least an additional 6.2 billion euros ($6.2 billion) to shield firms and families from surging energy costs and consumer prices, the office of Prime Minister Mario Draghi said in a statement on Thursday.

The extra funding stems from increased fiscal revenues as a result of the higher energy costs and will be used to fund a new relief package, which the government plans to approve after getting the green light from parliament, it added.

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Probably the last major act of Draghi’s government ahead of a snap election on Sept. 25, the new scheme will come on top of 52 billion euros already budgeted this year to soften the impact of sky-high electricity, gas and petrol costs.

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The size of the new package is still to be finalized as the Treasury is seeking additional resources by adjusting some other areas of state budget, a government source said, adding the final figure could more than double and reach 13 billion euros.

Draghi and Economy Minister Daniele Franco are strongly opposed to breaching this year’s fiscal deficit target of 5.6% of national output set in April, despite pressure from several parties to do so, two separate government sources said.

The European Central Bank raised its key interest rates by an unprecedented 75 basis points on Thursday and promised further hikes, prioritizing the fight against inflation and complicating Italy’s efforts to head off recession risks and reduce public debt.

Among a raft of measures, the sources said the Treasury planned to boost and extend until the end of the year some existing tax breaks and subsidies aimed at helping energy-intensive enterprises and poor households.

Some of the resources could also finance a scheme to help firms hit by energy costs furlough staff rather than fire them, they added.

($1 = 1.0041 euros) (Reporting by Giuseppe Fonte; Editing by Agnieszka Flak and Mark Potter)



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