Italy’s government has secured a win in the Chamber of Deputies on 20 December 2024 by securing a confidence vote on its 2025 budget. The budget seeks to reduce next year’s fiscal deficit to 3.3% of gross domestic product (GDP), down from the projected 3.8% in 2024. It also introduces tax cuts for low and middle-income earners.
As an EU Member State, Italy is required to reduce its budget deficit after exceeding limits in 2022 and 2023 and pledged to cut the deficit below the EU’s 3% of GDP ceiling by 2026. Italy’s public debt is the second highest in the EU and is expected to increase throughout 2026, rising from 134.8% of GDP in 2023 to 137.8% in 2026.
Meloni’s third budget raises next year’s deficit to 3.3% of GDP from 2.9%, adding EUR 9 billion to fund tax cuts and other measures. Another EUR 4 billion will come from temporary tax changes for banks and insurers. Cryptocurrency capital gains tax will remain at 26% next year and increase to 33% in 2026 instead of the previously proposed 42%.
The motion for the bill passed by a wide margin of 211 to 117, positioning Prime Minister Giorgia Meloni’s administration to obtain final parliamentary approval for the budget package. It will be presented to the upper house Senate for final approval next week.
