Draft budget sent to Brussels

The government sent its Documento programmatico di Bilancio, the planning paper for the 2027 budget, to Brussels and Parliament overnight. The package is about 23.5 billion euros and directs the largest share to families, fragile people, defence and businesses. Economy Minister Giancarlo Giorgetti, speaking to reporters on the sidelines of IMF meetings in Bangkok, said the budget law would probably be finished the following week and then presented to Parliament. He described a constructive dialogue with the European Commission on national escape clauses for defence and energy, and said he had also met Dombrovskis in Bangkok.

Banks, insurers and other funding

About 13.5 billion euros comes from EU fiscal flexibility, while the rest is covered by bank and insurance contributions, ministry cuts, gambling revenue and smaller items. The bank and insurance share is about 5 billion euros this year, falling to roughly 2.6 billion in 2028 and 2.4 billion in 2029, or about 10 billion over three years. Ministry cuts amount to about 1.2 billion this year, gambling to about 1 billion, and nearly 3 billion is listed as other revenue. Giorgetti confirmed that the financial system will be asked for a contribution, which he said it could sustain.

“I confirm that a contribution will be asked of the financial system, because we believe it can sustain it.”

He added that keeping the spread under control serves everyone, banks included, since they hold billions of euros of Italian government bonds on their balance sheets. Asked whether banks might challenge the measure in court, he said all Italians could take the state to court for raising taxes, and that he did not believe anyone would die as a result.

Spending priorities and tax plans

Family policies and social spending receive about 5 billion euros in 2027, equal to 0.21% of GDP, and health receives 2.4 billion. Defence gets nearly 5 billion euros according to one estimate, while another puts new defence resources at about 4.5 billion in 2027, lifting defence spending from 1.3% to 1.6% of GDP. The draft projects fiscal measures of 2.1 billion euros next year, rising to about 5 billion in 2028. On income tax, Giorgetti said the central choice is between selective and general cuts.

“It is not right that only the minister decides. We will assess it together with the parties, the party leaders and President Meloni.”

A planned extension of the 33% bracket from 50,000 to 60,000 euros, costing about 2.7 billion, may be set aside. Deputy Prime Minister Antonio Tajani has floated a card for dental and eye care that would help elderly and fragile people pay for health costs outside the national health service.

Health and household finances

Health Minister Orazio Schillaci asked the Economy Ministry for 5.5 billion euros, and the regions sought 18 billion over three years. The draft allots health 0.10% of GDP, falling to 0.08% in 2028 and 0.07% in 2029, and with a carried-over billion from last year's budget the 2027 total reaches 3.4 billion. Lombardy's welfare assessor Guido Bertolaso said the government's health figures were being followed closely.

“We are following this with great attention, and also with concern.”

Istat data cited in the hearing show household disposable income rose 0.4% in the second quarter while consumer prices rose 1.4%, so purchasing power fell 0.9% on the previous quarter. In 2025, 29.4% of families cut the quantity or quality of the food they bought, down from 31.1% in 2024.

What comes next

The government is still negotiating with Brussels over how to classify about 14 billion euros of spending room granted over two years for energy, and over extra flexibility against inflation. The draft puts the deficit at 2.9% of GDP this year, rising to 3.4% in 2027 and 3.2% in 2028 because of the flexibility clause. Excluding that clause, the document says the deficit-to-GDP ratio would stay below 3% through the forecast period.

2026

2.9 % of GDP

2027

3.4 % of GDP

2028

3.2 % of GDP

Data from the article text

Giorgetti expects the budget law text to reach Parliament in the week of 19 October.