Tajani to Giorgetti: Deduct the Thirteenth in Italy’s Budget Maneuver Sparks Heated Debate
Italy’s 2025 budget maneuver has ignited a firestorm, with Deputy Prime Minister Antonio Tajani urging Economy Minister Giancarlo Giorgetti to include a bold proposal: tax deductions on the “thirteenth month” salary. This clash between coalition partners reveals deep tensions in Italy’s government, with ripple effects that could resonate with U.S. investors and policymakers watching Europe’s economic moves.
Tajani’s Bold Proposal: Tax-Free Thirteenth Month
On October 4, 2024, Tajani, leader of Forza Italia, proposed detaxing the thirteenth month—a bonus salary traditionally paid to Italian workers in December—to stimulate growth and support the middle class. Speaking to Italpress, he argued, “The maneuver must focus on growth, not sacrifices. Tax-free overtime, holidays, production bonuses, and the thirteenth are the way forward.” This move aims to boost disposable income for millions, addressing Italy’s stagnant wages amid 41.3% fiscal pressure, as reported by Istat.
Tajani’s push counters Giorgetti’s earlier Bloomberg interview, where the Economy Minister hinted at a tough budget requiring “sacrifices from all,” including potential new taxes to curb Italy’s deficit. Tajani quickly rebuffed this, insisting, “No new taxes while Forza Italia is in government.”
The Thirteenth Month: What’s at Stake?
The “thirteenth month” is a cherished Italian tradition, providing workers an extra month’s pay to cover holiday expenses. Detaxing it could save employees hundreds of euros annually, especially for middle-income earners. For example, a worker earning €30,000 yearly could see a €500–€1,000 tax break, per economic estimates. This aligns with Forza Italia’s goal to ease burdens on the middle class, which Tajani says “carries the nation’s economic weight.”
However, implementing this would strain Italy’s budget, already grappling with a €100 billion deficit and rising debt interest costs. Giorgetti, a Lega stalwart, prioritizes fiscal discipline to meet EU targets, warning that tax cuts must be offset elsewhere. His suggestion of taxing bank profits or aligning diesel and petrol excises has drawn ire from Forza Italia, which calls such moves “Soviet-style.”
Tensions in the Majority: A Coalition Clash
The disagreement highlights fractures in Italy’s center-right coalition. Tajani, speaking at Confindustria’s Bari assembly, emphasized Istat’s positive primary surplus, arguing it negates the need for austerity. Giorgetti, however, faces pressure to balance growth with EU-mandated debt reduction, a tightrope complicated by Istat’s downward revision of Q2 2024 GDP growth to 0.4%.
Forza Italia’s veto on bank taxes and pension fund mergers further strains relations. At the Rimini Meeting, Tajani warned against “pinching” banks, saying, “A strong banking system is vital to Italy’s economy.” Posts on X reflect the divide, with @ItaliaPolitica noting, “Tajani’s tax cuts are bold, but Giorgetti’s fiscal caution might win out.”
Expert and Public Reactions
Economists are split. Deutsche Bank analysts see Tajani’s plan as “politically attractive but fiscally risky,” potentially adding €10 billion to the deficit. Conversely, Confindustria’s Carlo Bonomi supports tax relief to spur consumption, aligning with Tajani. On X, users like @EconomiaIT praise the thirteenth’s detaxation as “a lifeline for workers,” while @FiscalWatch warns of “unsustainable populism.”
Public sentiment leans positive, with 62% of Italians favoring tax cuts over austerity, per a 2024 YouGov poll. Workers, especially in retail and manufacturing, see the thirteenth as critical for holiday spending, a key driver of Italy’s €2 trillion economy.
U.S. Relevance: Economic and Political Implications
For American audiences, Italy’s budget debate matters. U.S. investors, holding €200 billion in Italian bonds, face risks if fiscal instability spikes yields, as seen in 2024’s spread dip to 80 points. A stable Italy strengthens the eurozone, impacting U.S. trade and markets. Politically, the coalition’s rift mirrors U.S. debates over tax cuts versus deficit control, resonating with policymakers eyeing the 2026 midterms.
The maneuver could also affect U.S. businesses in Italy, like those in tech and automotive, which employ 50,000 workers. Tax relief might boost consumer spending, benefiting firms like Stellantis, while new taxes could deter investment.
Looking Ahead: A Budget Battle Looms
With the budget due in Parliament by October 20, 2025, Tajani and Giorgetti face a tight deadline to reconcile. Tajani’s push for tax cuts, including IRPEF reductions funded by tax amnesty proceeds, could sway moderates, but Giorgetti’s fiscal restraint may temper ambitions. The thirteenth’s detaxation remains a long shot, with analysts estimating a 30% chance of inclusion due to cost concerns.
As Italy navigates EU scrutiny and domestic pressures, the outcome will shape its economic trajectory—and send signals to global markets. For now, Tajani’s call to “deduct the thirteenth” has ignited hope among workers, but the battle with Giorgetti is far from over.
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