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ENERGY

Electricity bills in Italy rise by almost 30 percent from Friday

Households and businesses in Italy will be paying more for electricity and gas from Friday with another steep price rise at the start of the third quarter, despite government measures to limit the increase.

Energy prices are set to rise in Italy this week despite government interventions.
Energy prices are set to rise in Italy this week despite government interventions. Photo: Sebastien Bozon/AFP

Household electricity bills will rise by 29.8% for the typical family and gas bills will go up by 14.4%, Italy’s energy regulatory authority Arera confirmed in a press release on Tuesday evening.

The new national tariffs come in from Friday, at the start of the fourth quarter of 2021 (October-December).

The increase comes amid surging energy costs across Europe, and beyond.

The price rise passed on to Italian consumers could’ve reached 45 percent, Arera said, if the government had not stepped in to cap the new rise in rates.

The Italian government last week announced measures costing three billion euros aimed at limiting a steeper rise in energy prices for consumers.

READ ALSO: Italy to spend €3bn on keeping household energy bills down as prices soar across Europe

As well as keeping the cost to most families below 30 percent and 15 percent, the government measures will keep additional costs at zero for those least well-off, including households with an income under 8,265 euros, families with at least 4 dependent children with an income of less than 20,000 euros, those who receive a state pension or unemployment benefit, and people who are seriously ill, Sky TG24 reports.

The measures also cut the ‘general charge’ from gas bills for all throughout the last quarter of 2021, and on electricity for families and some small businesses.

Last quarter, the retail cost of electricity rose by 9.9% and gas by 15.3% from July 1st.

The government also stepped in that time to cap costs, with 1.2 billion euros in state aid.

Italian Prime Minister Mario Draghi said last week that many of the reasons for the energy price increases were temporary but called for long-term action, including at a European level, to address the problem, including through diversifying supplies.

READ ALSO: When can you switch on your heating in Italy this winter?

Italy is highly dependent on imports and consumes a large amount of gas.

Some 40 percent of its primary energy consumption is gas, compared with about 15 percent in France, according to official statistics for both countries.

Europe is facing soaring power prices as its economy recovers from the coronavirus pandemic, while natural gas reserves are at a worrying low level as winter approaches.

Italian consumers are now paying some of the highest electricity prices in Europe, with the average cost already at 145.03 euros per mw/h (megawatt hour) according to newspaper Corriere della Sera.

This means the cost is higher than in Portugal and in Spain, where electricity costs have soared to 141.71 euros per mw/h, reaching an all-time high on September 9th after significant price rises across much of Europe over the past 12 months.

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MONEY

How much does it cost to raise a child in Italy?

How big is the financial commitment parents have to make in Italy to pay for their offspring’s needs and expenses until they’re grown up and independent? Here's a look at the predicted costs.

How much does it cost to raise a child in Italy?

Family is the bedrock of Italian society, but it’s also an unbalanced economic crutch, propping up children who leave home much later than most of their European counterparts.

Various factors are at play, from a declining birth rate, youth unemployment, being unable to get on the property ladder to young Italians moving abroad in search of better financial opportunities.

It probably comes as little shock, then, that parents in Italy end up forking out huge sums of cash to support their offspring through childhood and early adulthood (and beyond).

Even just up to the age of 18, raising a child in Italy can cost upwards of €320,000, according to data from Italian consumer research body ONF (Osservatorio Nazionale Federconsumatori).

The average spend of raising a child from 0-18 years is €175,642, but it rises in families with high incomes, classed as over €70,000 per year.

READ ALSO: Italian class sizes set to shrink as population falls further

Researchers noted that the cost of bringing up children has jumped up following the effects of the pandemic too: compared to 2018, child-rearing expenses increased by 1.2 percent by 2020.

The decrease in expenditure related to transport due to spending more time at home, as well as those incurred for sports and leisure activities, was not enough to mitigate the increase in costs for housing and utilities, which increased by 12 percent compared to 2018.

Photo by Suzanne Emily O’Connor on Unsplash

Food prices rose by 8 percent compared to 2018 and education and care jumped by 6 percent for the same timeframe.

In fact, Italy ranks as the third most expensive country in the world for raising children, only coming behind South Korea and China, according to data from investment bank JEF.

The pandemic has contributed to extending an already growing phenomenon: the decrease in annual income of Italian households.

Household income dropped by 2.8 percent from 2019 to 2020, the report found, citing data from national statistics agency Istat. It marks a further squeeze for families, especially low-income and single-parent families.

Depending on earnings, the amount needed to bring up a child until the age of 18 varies considerably.

READ ALSO: ‘Kids are adored here’: What being a parent in Italy is really like

A two-parent family with an annual income of €22,500 spends an average of €118,234.15 to bring up a child until the age of 18; for the same type of family but with an average income of €34,000 per year, the total expenditure to bring up a child increases to €175,642.72.

For high-income families, stated as over €70,000 annually, raising a child costs €321,617.36 on average.

The figures mark an increase of around €5,000 for low- and middle-income families, and a much sharper rise of €50,000 for high-income families, compared to ten years ago.

The money gets spent on housing, food, clothing, health, education and ‘other’ categories. The report revealed that the average spend on a child aged 16 years old is almost €11,500 annually, amounting to €955.78 per month.

Almost €2,000 per year gets spent on food, €1,615 goes on transport and communication, €782 goes on clothing and €1,600 goes on education annually, the report found.

They begin small, yet the costs are anything but. (Photo by LOIC VENANCE / AFP)

For the ONF, “these data highlight how, today more than ever, having a child is becoming a luxury reserved for the few, which fewer and fewer Italians are able to afford.”

READ ALSO:

The numbers on supporting children after their 18th birthday are a little hazier, as when children eventually fly the nest varies – but figures from Eurostat show that Italy ranks third in Europe for the average oldest age at which children move out of the parental home, at 30.2 years old.

Only young people from Croatia and Slovakia wait longer to live independently, while the EU average for flying the nest is 26.4 years old.

Even then after eventually leaving home at over 30 years old, it’s not entirely clear how many Italians are fully independent once they get their own address, or whether their parents continue to bankroll their living costs.

Italy’s president Sergio Mattarella sent a message to Italy’s Birth Foundation (Fondazione per la Natalità) in May stating, “The demographic structure of the country suffers from serious imbalances that significantly affect the development of our society.”

In response to worsening economic circumstances, the Italian government has recently pledged to do more to help people have families and reverse Italy’s continuing declining birth rate.

It has introduced the Single Universal Allowance (L’assegno unico e universale), but along with it has dropped various so-called ‘baby bonuses’ that provided lump sums to new parents.

The new allowance is a monthly means-tested benefit for those who have children, or are about to have a child. It is payable from the seventh month of pregnancy until the child reaches the age of 18 or in some cases, 21. For more information on what it is and how to claim it, see here.

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