Italian Government Demands ETS Reform and Warns Against EU Tax

Italian economic policy has been marked by a radical call for reform of the European Union's climate policy. Minister of Enterprise and 'Made in Italy' Adolfo Urso called for the suspension of the ETS mechanism ahead of its planned revision. According to the government in Rome, the current formula of the system acts as a de facto tax harming the competitiveness of Italian companies. This demand has been supported by a number of politicians, including representatives of the ruling party, who describe the system as a "tragic mistake" by Brussels. French voices, including that of Minister Séjourné, also suggest the need to renegotiate the rules, indicating the formation of a broader coalition of Southern European countries seeking to relax the rigors of the green transition. The European Green Deal and the ETS system were designed following the 2015 Paris Agreement as key tools leading the European Union to climate neutrality by the mid-21st century.At the same time, the President of the European Central Bank, Christine Lagarde, during a speech before the European Parliament, presented an optimistic forecast regarding the fight against high prices. She stated that the bank's efforts are yielding the desired results, and inflation should stabilize at the 2% target in the coming years. However, this information was accompanied by controversy over the bank's executive board salaries; it was revealed that Lagarde's salary will increase in 2025 to almost half a million euros annually. Despite this, the financial markets reacted calmly, and the Milan stock exchange closed the session in positive territory, supported by gains in the energy and automotive sectors. The banking and insurance sector in Italy is grappling with its past. The Milan prosecutor's office is investigating suspicions of an illegal agreement, known as concerto, between leading investors in the Generali and Mediobanca institutions, which is alleged to have lasted since 2019. In the background of these events, data on Italy's excellent export performance in 2025 has emerged, placing the country fourth in the world. However, analysts point to a structural weakness: almost half of Italian exporters base their sales on only one foreign market, which, given rising geopolitical threats and the risk of tariffs from the USA, poses a serious systemic risk.„I nostri sforzi di politica monetaria stanno portando risultati e l'inflazione raggiungerà il 2% nel medio termine.” (Our monetary policy efforts are yielding results and inflation will reach 2% in the medium term.) — ECB President