In line with a recent decree enacting reforms to Italy’s civil protection system, the cost of reconstructing the areas affected by recent earthquakes will be part-financed by an increase in fuel taxes.
In that decree, it was agreed that, from the moment that a state of emergency is declared, previously-unforeseen expenditure will be funded by adding a maximum of up to EUR0.05 (USD0.062) per litre on fuel excise duty.
In this case, in order to cover the reconstruction that will be necessary in the areas of Reggio Emilia and Rovigo, the fuel excise duty will be increased immediately by EUR0.02 per litre, to yield, it is reported, some EUR500m in the period to the end of December this year. Despite the current high petrol prices, which will thereby be further increased, the government hopes that Italians will see the necessity for a national funding of the emergency.
In addition, an unspecified amount of funds will be allocated out of the savings being contemplated in the government’s spending review, while assistance is already being promised by the European Commission.
A postponement of all tax and social security payments in the affected areas until the end of September, at least, has also been announced, and this will also include suspension of all mortgage payments. The government will provide grants for the reconstruction and repair of homes damaged by the earthquakes, and for the reinstatement of public services (particularly schools).
Furthermore, the government is looking to make sure that economic activity recommences in those areas as soon as possible. In particular, it is expected that low-interest loans will be made available, as well as assistance for companies to relocate their productive capacity..
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