Italy's League Party Proposes Bank Levy to Fund 2027 Budget

Italy's co-ruling League party has proposed a new levy on bank profits to help fund the government's 2027 budget. The party suggested that a 5% tax on profits could generate between €2 billion and €3 billion, which would be directed towards supporting families and businesses, as well as strengthening security measures.

The proposal was discussed at a conference on budget priorities, where Economy Minister Giancarlo Giorgetti, a senior League member, defended the idea. He argued that the banking sector suffers from a lack of competition, which allows for what he termed 'systemic rents.' Giorgetti questioned whether struggling entrepreneurs and retirees face fair terms when seeking loans or switching accounts, suggesting that increased competition would address these imbalances.

The minister has previously attributed banks' large profits to European Central Bank interest rate hikes and state guarantees on loans issued during the COVID-19 pandemic.

The plan has, however, met resistance within the ruling coalition. Forza Italia, led by Foreign Minister Antonio Tajani, has expressed opposition to a new levy. Tajani has stated that any contribution from the financial sector should be agreed upon with the companies involved and structured as advance tax payments rather than new taxes.

This proposed €2-3 billion contribution would be in addition to roughly €12 billion the government already expects to raise from banks and insurers through 2028, via measures in the 2026 budget, including a higher IRAP corporate tax band.

The League has also indicated that major energy groups should contribute to government efforts to lower electricity, gas, and fuel prices. This budget is set to be the last presented by Prime Minister Giorgia Meloni's government before the next national elections.