Italy to approve new package against inflation next week, minister says

The Italian government is preparing a new multi-billion euro package to help shield firms and families from surging energy costs and rising consumer prices, Foreign Minister Luigi Di Maio said on Thursday.

The measures are likely to be worth at least 10 billion euros ($10.01 billion), a government source told Reuters.

They come on top of some 52 billion euros already budgeted this year to soften the impact of sky-high electricity, gas and petrol costs, and will be approved a few weeks ahead of a Sept. 25 national election.

"Next week, the cabinet will adopt a new decree to curb the increase in energy bills," Di Maio told reporters.

Italian inflation jumped to 9.0% in August from 8.4% the month before, driven up by electricity and gas prices, preliminary data showed on Wednesday.

Business lobby Confcommercio and several retail bodies have called on outgoing Prime Minister Mario Draghi to extend tax relief to help firms tackle the energy crunch, and to rule that bills can be paid in smaller instalments.

Draghi has so far financed his anti-inflation packages with increased revenue from value added tax as a result of the higher energy costs and by adjusting other areas of the state budget, without increasing borrowing.

He has so far refused to hike this year's fiscal deficit above the target of 5.6% of national output which was set in April, despite pressure from several parties for him to do so.

Before finalising next week's package, the government wants to assess how much it will garner from a 25% windfall tax on energy groups that have benefited from surging oil and gas prices, political sources said.

Under the windfall tax scheme, a 40% down-payment was due by the end of June but thousands of companies refused to pay, leaving the government facing a potential revenue shortfall of more than 9 billion euros.

In response, Draghi said last month the down-payment would carry a 30% surcharge if paid by Aug. 31, after which it would rise to 60%.

As part of the relief package, the Treasury plans to fund an extraordinary layoff scheme to help firms hit by energy costs to furlough staff rather than sack them, the sources said.

($1 = 0.9988 euros)

(Editing by Gavin Jones and Frances Kerry)