Italy's banks face 4.5 billion euro 2026 budget levy

ROME

The Italian government has approved a 2026 budget plan requiring banks and insurance companies to contribute 4.5 billion euros through various measures.

Economy Minister Giancarlo Giorgetti said the contributions would be through a "mix of measures," without explaining further.

"I think they can be absorbed by the system without backlash," he said. 

Fed by provisions set aside by banks and insurance companies, the contributions will also include a rise in the local business tax.

In total, the contribution is expected to reach 4.5 billion euros in 2026, according to local media.

Italy's 2026 budget aims to bring the eurozone's third-largest economy in line with EU fiscal standards, with a public deficit of 2.8 percent of GDP expected for next year, below the EU limit of 3 percent.

The proposed budget does not include a direct tax on banks' superprofits, something coalition party Forza Italia, led by Deputy Prime Minister and Foreign Minister Antonio Tajani, had opposed.

Italian PM Giorgia Meloni called it a "serious" budget with the same priorities as the past two years: "family and birth rates, tax reduction, support for businesses, and healthcare."

The budget notably includes a tax cut of around 9 billion euros over three years aimed at the middle classes, a tax amnesty for the year 2023, and several small reassessments.

Italy's lowest pensions are expected to be increased by 20 euros per month, and the bonus for working mothers is set to rise from 40 to 60 euros per month.

The budget also provides an extra 5 billion euros next year for the struggling public health system.