Italy’s Parliament on Tuesday approved the government’s 2026 budget, a package that includes deficit-cutting measures designed to bring Italy’s shortfall down to 2.8% of gross domestic product for next year, down from a previously targeted 3%, in line with European Union requirements, according to Associated Press reporting.
The budget is about 22 billion euros, or $25.9 billion, and Parliament’s final vote in the lower house was decided by a 216-126 margin, AP reported. The approval completes the legislative step for the government’s spending and tax plan for 2026.
After the vote, Premier Giorgia Meloni posted on X that the budget was “serious and responsible” and that it was built “in a challenging context,” with limited resources directed to “families, work, businesses and health care,” AP reported. Her statement framed the measures as focused on support across household and economic priorities.
The measures drew criticism from Italy’s center-left opposition, AP reported. Elly Schlein, leader of the Democratic Party, said the budget law was inspired by austerity and would not be able to help low-income workers and families deal with rising prices, according to AP.
AP also reported that about 25% of the budget’s funding comes from the financial sector, with tax hikes hitting banks and insurance companies. Those levies, AP said, have drawn a warning from the European Central Bank that they could pressure domestic banks to reduce credit flows that the banks already provide in limited amounts to families and businesses.
The budget debate, as reflected in the opposition’s critique and the government’s response, underscores a central challenge for Italy’s policymaking: meeting EU fiscal targets while facing domestic political pressure over how the costs of adjustment are distributed, AP reported.