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Italy takes drastic measures to reduce energy costs

Italy energy

Rome, (Business News Report)|| Italy has taken strict measures to help consumers and companies reduce energy costs, in light of the significant rise in global oil prices.

Italy issued measures by decree, in a move aimed at curbing energy and fuel prices. The government has also allocated about 16 billion euros since last July in an attempt to reduce electricity and gas costs for companies and families.

The costs of these measures amount to 4.4 billion euros ($4.86 billion).

“We have taken important and motivated measures to respond to the consequences on our country of the war in Ukraine,” Prime Minister Mario Draghi told a news conference after a cabinet meeting on the issue.

“Let’s tax a part of the extraordinary profits that producers make thanks to the increased cost of raw materials, and redistribute this money to companies and families facing great difficulties,” Draghi added.

For his part, the Italian Minister of Economy and Finance, Daniel Franco, stated that the tax will be 10% on the additional profits achieved.

A government source said that the tax relates to the additional profits made during the past six months, by comparing them with the profits for the same period last year, AFP reported.

Draghi indicated that the funds that will be raised will help finance a package of measures worth 4.4 billion euros to mitigate the rise in energy prices.

European countries are looking to develop new strategies to reduce the cost of energy prices, which were already high and have risen further since the Russian invasion of Ukraine.

The Italian economy grew by 6.6% last year after a record contraction of 9.0% in 2020 due to the extended shutdown as a result of the Corona virus, and is currently facing increasingly weak growth expectations.

An Italian government source said that the Treasury is preparing to reduce the target growth rate significantly to less than 4% this year from the previous rate that was achieved last fall and amounted to 4.7%.

It should be noted that energy costs rose with the significant rise in oil prices during the past two weeks, influenced by the Russian-Ukrainian war.

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