Italy approves tight budget partly funded by a levy on banks and insurers

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Italy approves tight budget partly funded by a levy on banks and insurers

2024-10-16 19:16 Last Updated At：19:21

ROME (AP) — Italy’s far-right government has approved a budget for next year of about 30 billion euros ($33 billion), which officials say will be partly funded by a levy on Italian banks and insurers.

Prime Minister Giorgia Meloni said late Tuesday that the government expected to raise some 3.5 billion euros from banks and insurance companies to ensure better public services, especially the country's struggling health service, and help the most vulnerable citizens.

“As we promised, there will be no new taxes for citizens,” Meloni wrote in a post on X.

The 2025 budget law was agreed by ministers at a cabinet meeting late Tuesday, just in time to meet a deadline to submit the plan to the European Union. The measures still need to be approved by the Italian parliament, with a final vote expected by the end of the year.

Economy and Finance minister Giancarlo Giorgetti had been under intense pressure for weeks to reconcile the need to speed up Italy’s deficit reduction — closely watched by the EU — with the government’s expensive electoral promises.

“Someone would call it an extra profit (tax), I call it a sacrifice,” Giorgetti said at a press conference on Wednesday, commenting on the new levy on banks and insurers.

Government officials didn’t release details on the new financial levy. But some Italian media reported it would focus on temporarily removing deductions for lenders’ so-called deferred tax assets and increasing taxes on bankers’ stock options.

The minister revisited a prior plan by the right-wing government, which has repeatedly criticized banks for gaining excessively from higher interest rates.

A first attempt to tap lenders with a 40% windfall tax failed last year, after the move sparked a major selloff in Italian banking stocks, forcing the government to withdraw the plan.

Vice-Premier Antonio Tajani said in a post on X that the new contribution from banks will “not frighten the markets.”

Giorgetti said on Wednesday that additional resources will also come from a “spending review” imposed on Italian ministries, which have been asked to tighten their belts and propose spending cuts.

The 2025 budget also includes permanent cuts to income tax and social contributions for middle- and low-income earners, one of Meloni's main electoral pledges.

To fund the new package of measures, Italy will widen next year’s deficit to 3.3% of gross domestic product from an estimated 2.9%.

Rome is under pressure to keep its accounts under control, after having being placed under special monitoring by Brussels for running deficits far in excess of the EU’s 3% limit and for not reducing its mammoth debt, now close to 3 trillion euros.

Zelenskyy's 'victory plan' includes a big hurdle for the West: NATO membership for Ukraine

2024-10-16 19:14 Last Updated At：19:20

KYIV, Ukraine (AP) — Ukrainian President Volodymyr Zelenskyy said Wednesday his plan to win his country’s fight against Russia’s invasion could bring peace next year, but it contains a step that some crucial Western allies have so far refused to countenance: inviting Ukraine to join NATO before the war ends.

“If we start moving according to this victory plan now, it may be possible to end the war no later than next year,” Zelenskyy told his country’s Parliament.

He has recently been trying to win approval for the plan from Western partners, who so far have stopped short of publicly voicing their support for it.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

KYIV, Ukraine (AP) — Ukrainian President Volodymyr Zelenskyy was set to at least partially unveil a plan to win the war against Russia to his country's Parliament on Wednesday after weeks of dropping hints about the blueprint to lukewarm Western allies, including U.S. President Joe Biden.

The plan — comprising military, political, diplomatic and economic elements — is considered by many as Ukraine’s last resort to strengthen its hand in any future cease-fire negotiations with Russia. Thus far, however, no country has publicly endorsed it or commented on its feasibility.

Zelenskyy is keen to get the “victory plan” in place before a new U.S. president is sworn in next year, though Ukrainian officials say neither presidential candidate will necessarily improve Kyiv’s standing in the war.

Zelenskyy’s presentation to Parliament, announced on Monday by presidential adviser Serhii Leshchenko, comes during a bleak moment in Ukraine. The country’s military is suffering losses along the eastern front as Russian forces inch closer to a strategically significant victory near the crucial logistics hub of Pokrovsk.

At every turn, Kyiv is outnumbered by Moscow: The country is struggling to replenish ranks with an unpopular mobilization drive; its ammunition stocks are limited; and Russia’s superiority in the skies is wreaking havoc for Ukrainian defensive lines.

It’s not clear how much of his victory plan Zelenskyy will reveal on Wednesday; Leshchenko indicated that it would be fully unveiled, while other officials suggested that the president would not divulge its most sensitive elements to all lawmakers.

Either way, the plan essentially puts Kyiv’s future in the hands of its allies. Without it, any deal with Russia would almost certainly be unfavorable for Ukraine, which has lost a fifth of its territory and tens of thousands of lives in the conflict. Kyiv would be unlikely to ever recover occupied territory, or receive reparations for widespread destruction across the country.

Several elements of the plan have already come to light: making Ukraine a member of NATO; allowing the country to use Western long-range weapons to strike deep inside Russia; providing resources to strengthen Ukraine's air and other defenses, and intensifying sanctions against Russia.

Ukraine's surprise military incursion into Russia’s Kursk region in August was also part of the plan, Zelenskyy told reporters. He said the 1,000 square kilometers (386 square miles) of territory captured by Ukraine — along with other provisions of the plan — will likely serve as a bargaining chip in negotiations with Russia.

NATO’s Article 5 states that an attack against one member is considered an attack against all. Ukraine's inclusion in the alliance would deter Russian President Vladimir Putin from invading again, Ukrainian officials argue. Western leaders have so far been reluctant to guarantee an invitation, fearing escalation from Putin.

Ukrainian officials were expecting feedback from Western allies at a meeting of the Ukraine Defense Contact Group at Ramstein Air Base in Germany, during which defense leaders from 50-plus partner nations gather to coordinate weapons aid for the war. Scheduled for this past weekend, the summit was postponed after Biden canceled his attendance in response to Hurricane Milton in the U.S.

Zelenskyy has since toured Western capitals to present other key allies an outline of his vision. But none so far have given any indication they will support the plan. Some expressed concerns over the tight deadline set by Zelenskyy, who gave allies just three months to adopt the blueprint’s main tenets in late September.

Thus far, the U.S. has been Kyiv’s main backer during the two-and-a-half-year war. But Biden has balked at the request to use long-range weapons to strike specific targets inside Russia, fearing a possible escalation in the war. Meanwhile, an intensifying conflict in the Middle East between Israel and Hezbollah that risks embroiling Iran has diverted Washington’s attention.

Many expect Democratic nominee and Vice President Kamala Harris to continue Biden’s policy and maintain the status quo. Under Biden, U.S. assistance to Kyiv, though substantial, has consistently arrived too late to make a significant difference for Ukrainian forces.

Republican nominee and former President Donald Trump has only said that he’d end the war quickly, without saying how.

Meanwhile, Brazil and China have proposed alternate peace plans that Zelenskyy has rejected, saying they would merely pause the war and give Moscow time to consolidate its battered army and defense industry.

Follow AP's coverage at https://apnews.com/hub/russia-ukraine