Italy's coalition races to finish the 23.5 billion euro 2027 budget before cabinet meeting

Budget timing and the EU verdict

Italy's coalition is finalising the 2027 budget law, the Legge di Bilancio, put at 23.5 billion euros. The draft budget document approved on 13 October set out the broad lines, but the detailed figures remained open on 26 October while Rome waited for the European Commission's verdict on the flexibility it wants for defence and energy spending. AGI reports that the bill is expected at the Council of Ministers on Wednesday 28 October, after earlier reports had pointed to the following day. The majority aims for a green light by Wednesday if possible. Leaders met on the evening of 26 October, the third meeting in seven days, and Giorgia Meloni stayed in contact with Antonio Tajani, Matteo Salvini, Maurizio Lupi and Giancarlo Giorgetti.

Tax cuts and the cost of coverage

Income tax is the most contested item. The draft document earmarks about 2.2 billion euros for tax measures, which rules out cutting the 33% bracket for incomes between 50,000 and 60,000 euros, a step that would cost 2.7 billion. A compromise limiting the bracket to incomes up to 55,000 euros would cost 1.2 billion. The Lega wants the flat tax for self-employed workers raised from 85,000 to 100,000 euros, a change that still needs EU approval. Coverage is the other sticking point, since the draft document asks the financial sector for more than 5 billion euros. Forza Italia says any tax on banks is off the table unless a shared solution is found, and one option under discussion is excluding the Bcc cooperative banks from the levy.

Income up to 55,000 euros1.2

Income from 50,000 to 60,000 euros2.7

Income up to 55,000 euros

1.2 billion euros

Income from 50,000 to 60,000 euros

2.7 billion euros

Data from the article text

Youth, families and pensions

Young workers are a priority. One proposal is a substitute tax of around 5% for under-30 new hires, while another is a 5% flat rate for under-30s and under-35s earning up to 20,000 to 30,000 euros. Families could receive stronger parental leave, a social security booklet for newborns and support for working mothers with three or more children. Noi Moderati, led by Maurizio Lupi, wants the bonus for private schools renewed at up to 1,500 euros per student, noting that 14,000 applications were filed this year for households with an ISEE below 30,000 euros. On pensions, the Lega is pressing hard, and AGI reports a possible opening to retirement at 64 under the mixed regime. Salvini, re-elected party secretary, framed the constraints this way:

“It is not easy to find the billions needed to do everything we want to do in a very complicated economic moment.”

Finance minister Giorgetti has repeated that resources are tight, telling the Lega's extraordinary congress that politics is about what is possible.

“Politics is the art of the possible, not of the impossible.”

Health costs, housing and rent

The most discussed health measure is a card for over-75s. Forza Italia proposes 300 to 500 euros per person to cover healthcare costs outside the public service, such as visits, drugs and tickets, with an ISEE threshold or a cashback system as options. Simulations reported by the press put the fund at 2.5 to 2.8 billion euros and estimate about 7 million eligible people at a 50,000 euro income limit, about 5.6 million at 35,000 and 4.8 million at 29,000. Amounts, eligibility rules and payment methods are still to be defined. Undersecretary Marcello Gemmato reassured regions worried about funding.

“We foresee an increase in the national health fund.”

On housing, the deduction for renovating a main home would fall from 50% to 36% in January without a corrective measure. The ministry is working on an extension and a 75% rate for high-efficiency works such as heat pumps and insulation. Long-term rentals at the agreed rent could see the flat rental tax cut to 5%, and buyers under 36 could be exempt from registration, mortgage and cadastral taxes. The budget may also raise the spending ceiling for medical devices, easing the payback burden on companies in the sector.

What comes next

The main unknown is the answer from Brussels on flexibility, and majority sources describe talks on the national clause as proceeding productively. Funding for Ukraine did not come up at the leaders' summit, according to the same sources. The next milestone is the Council of Ministers meeting expected on Wednesday 28 October, when the budget law is due to be considered.