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Businesses sound the alarm as Italy prepares new anti-inflation package

Giuseppe Fonte and Gavin Jones

ROME (Reuters) – The Italian government said on Thursday it was preparing a new multi-billion-euro package Plans to help protect businesses and households from soaring energy prices, after the country’s main business lobby warned an “economic earthquake” was looming.

Carlo Bonomi, president of the employers’ association Confindustria, said in a radio interview that Italian industry has the highest energy costs in Europe and that gas prices need to be capped at European or domestic levels.

Bonomi said businesses cannot wait for a new government to take office after the September elections. 25 and called on outgoing Prime Minister Mario Draghi to take urgent measures.

“We are facing an economic earthquake,” he said.

Foreign Minister Luigi Di Maio told reporters that the cabinet will meet next week to approve “a new decree to curb the increase in energy bills”.

These measures may be worth at least 10 billion euros ($10.01 billion), a government source said. They have mitigated the impact of sky-high electricity, gas and petrol costs on top of some 52 billion euros already budgeted for this year.

Growth in Italy, the third largest in the European Union, jumped to 9.0% in August from 8.4% in the previous month, driven by higher electricity and gas prices, preliminary data on inflation showed on Wednesday. Economy.

Rival dairy companies Granarolo and Lactalis Italia issued a joint statement on Thursday asking the government to step in to prevent rising costs from having “catastrophic consequences” for them and their suppliers.

Rationing plan?

Bonomi says Draghi should make plans for possible energy rationing and warns 20 If Russia is in continuation with Ukraine If the conflict suspends gas exports to countries that oppose it, % of Italian companies may have to stop operations.

To avoid rationing, the government said it plans to drop the heating temperature in public and private residential buildings by 1 degree Celsius from October, while reducing the heating time by 1 hour per day.

Confcommercio, an association of retail and service companies, issued a similar warning: Wednesday, 31, 01 Italian service companies may close down in the next 10 months, 370,01 times unemployed.

Manufacturing companies are already struggling, with the industry shrinking for a second straight month in August, a closely watched survey showed on Thursday.

Confcommerci o asks Draghi to extend tax breaks to help businesses deal with energy crunch and provide for small installments.

Draghi finances his anti-inflation package by increasing value-added income tax due to rising energy costs and by adjusting other areas of the state budget without increasing borrowing.

So far, he has resisted raising this year’s fiscal deficit beyond the 5.6 percent target of national output set in April despite pressure from multiple parties to do so.

Before finalizing next week’s package, the government wants to assess that it will benefit from oil 25 political sources say and windfall taxes imposed on energy groups with soaring gas prices.

40% down payment due at end of June under windfall profits tax scheme, but thousands of companies refuse to pay, government faces over $9 billion potential income gap of n euros.

In response, Draghi said last month that if the down payment would come with 31% The surcharge is payable before August 31 and will rise to 31% thereafter.

($1 = 0.9988 EUR)



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