Italy’s Parliament approved the government’s 2026 budget on Tuesday, a package that includes measures aimed at cutting the deficit and aligning with European Union fiscal demands, according to the Associated Press.
The budget, described as totaling about 22 billion euros (or $25.9 billion), sets out a target of reducing the 2026 deficit to 2.8% of gross domestic product, down from the previously targeted 3%.
In the lower house, the conservative coalition led by Premier Giorgia Meloni won the final vote on the budget by 216-126, a result the government hailed as moving forward under difficult economic conditions.
After the approval, Meloni posted on X that the budget was “serious and responsible,” adding that it concentrated limited resources on “families, work, businesses and health care.”
The center-left opposition questioned the substance of those priorities. Elly Schlein, leader of Italy’s Democratic Party, said the budget law was inspired by austerity and was unable to help low-income workers and families cope with rising prices.
The Associated Press report also said about 25% of the budget’s funding comes from the financial sector, with tax increases aimed at banks and insurance companies.
The European Central Bank has warned that those levies could push domestic banks to cut their already limited flow of credit to families and businesses, raising concerns that the deficit-focused measures could tighten financing conditions in the broader economy.
The approval came as Italy’s political debate continues to focus on how much fiscal tightening should be balanced against support for household incomes and the cost of living.