Italy ups financial aid as energy costs soar again

Italy said Friday it was stepping up efforts to ease the strain of high electricity and gas bills for homes and businesses, with a total of €5.5 billion worth of measures.

Energy prices in Italy
Italy's rising electricity prices. Photo: analogicus / Pixabay

The government had already alloted €3.8 billion for households and companies for the first quarter of 2022 in the budget, but added €1.7 billion on Friday, mainly for large businesses.

The state suspended or reduced taxes and charges related to gas and electricity bills last year, spending €4.2 billion in 2021 on supporting people and firms hit hard by the coronavirus pandemic.

Italy, which has not produced nuclear energy for over three decades, is extremely dependent on imports and consumes a lot of gas.

READ ALSO: Rising energy prices: How to save money on your bills in Italy

Gas accounts for between 35 and 40 percent of the country’s primary energy consumption, compared with around 15 percent in France, according to official statistics from both countries.

Natural gas prices have reached historic highs in recent months, affecting electricity prices across Europe.

The cost of energy for service sector companies in Italy is expected to reach €19.9 billion in 2022, compared to €8.9 billion in 2020, according to calculations by trade organization Confcommercio.

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Italy’s Draghi criticises Germany over latest energy plan

Outgoing Italian PM Mario Draghi condemned Germany’s €200-billion energy-prices shield, saying EU ‘must act together’.

Italy's Draghi criticises Germany over latest energy plan

Outgoing Italian Prime Minister Mario Draghi and his likely successor have criticised Germany’s 200-billion move to shield its citizens from rising energy prices, saying Europe must act together to tackle the energy crisis.

“Faced with the common threats of our times, we cannot divide ourselves according to the amount of room in our national budgets,” Draghi said in a press release on Thursday.

READ ALSO: Electricity bills in Italy to rise by 59 percent, warns power regulator

The statement came after Germany introduced a 200-billion ($194-billion) shield to protect households and businesses from soaring energy prices, 

The measure was Germany’s move in what the country’s Finance Minister Christian Lindner described as an “energy war over prosperity and freedom” with Russia.

“The energy crisis requires a response from Europe to reduce costs for families and businesses, to limit exceptional gains made by producers and importers, […] and to keep Europe united once against in the face of an emergency,” Draghi said, commenting on Germany’s move.

At a meeting of EU energy ministers in Brussels on Friday, Italy’s Roberto Cingolani reiterated Rome’s support for an EU-wide cap on the price of gas – something Draghi has long been calling for.

“Everyone has recognised that there is a priority at the moment, which is to bring down the cost of gas. But there is also a second priority, [that is] to avoid creating a shortage of gas in doing so,” Cingolani said.

READ ALSO: Portofino mayor offers residents €400 to offset energy bills

Draghi will only be in office for a few more weeks, after which he will likely be replaced by Giorgia Meloni, whose far-right Brothers of Italy party triumphed at last Sunday’s elections.

Like Draghi, Meloni has backed the idea of a European price cap thus far. 

Ahead of Friday’s energy meeting in Brussels, the soon-to-be new Italian PM also appeared to criticise Germany as she called for “an immediate European response” to the energy crisis.

“No member state can offer effective and long-term solutions on its own in the absence of a common strategy, not even those that appear less financially vulnerable,” she added.