The Italian government has approved nearly 8 billion euros ($9 billion) in aid to protect consumers and businesses from soaring energy prices that are weighing on the economic outlook, including 1 billion euros for the automotive industry.
Some 6 billion euros have been allocated for energy aid, Prime Minister Mario Draghi told reporters on Friday.
The Draghi administration had already allocated more than 10 billion euros to offset soaring energy prices for consumers. Although these measures are extended in duration and size, the new package will not require increasing the country’s deficit, but will be financed by Italy’s better than expected economic performance.
The package includes:
- A fund to support the green transition in the automotive sector with 1 billion euros per year for eight years, including incentives for the purchase of electric and bi-fuel cars
- Expand Italy’s domestic gas production to around 5 billion cubic meters from 3.2 billion cubic meters
- Simplify the authorization of renewable energy plants
- Extension of gas storage facilities
The government said earlier this week it would spend hundreds of millions of euros to support a battery factory planned by Stellantis in Termoli, southern Italy.
Italian energy regulators said this week that electricity bills could rise by 131% in the first quarter and that natural gas bills are expected to rise by more than 90%.
Draghi has presided over a 6.5% expansion of the Italian economy in 2021. Growth is expected to slow to around 4% this year, slightly less than expected.
“We are still in a phase of slowing growth in Europe,” Draghi said. “It should pick up at a strong pace in the second quarter, according to forecasts, but we must remain cautious because there are geopolitical risks.”