Italy Targets €5.9 Billion From Financial Sector in 2027 Budget
Key Facts
Carlo Messina, chief executive of Intesa Sanpaolo, criticized measures in Italy’s draft 2027 budget concerning the deferral of tax credits owed to banks, warning that the way they are implemented could prompt the European Central Bank to ask Italian banks to reduce their holdings of government bonds. The plan allows the state to spread payments owed to banks in 2027 over 10 years, Messina told Reuters. He said banks would consequently have to reclassify the credit associated with those receivables as higher risk. His warning therefore focuses on the potential impact on asset valuations and banks’ exposure to sovereign debt, not on European intervention in taxes themselves. Messina’s comments come as the government seeks to raise revenue from the financial sector to fund tax cuts and spending increases in the coming budget.
The plan covers more than €20 billion in tax credits linked to home renovation incentives granted in 2023, which were available in 2027 to taxpayers and financial and non-financial companies. The measure provides for these credits to be spread over 10 years, rather than settled within the period in which they were due. Messina links the change to the higher credit risk banks will record when they reclassify the receivables. He described the approach as a “Latin American approach” to managing public debt, referring to the way liabilities are distributed over several years. He said the ECB could later ask banks to reduce their holdings of government bonds, linking the potential impact of the tax measure to state financing and banks’ sovereign portfolios.
Italy aims to collect €5.9 billion from the financial sector to help fund tax cuts and spending increases in its 2027 budget, with proceeds set to rise to €12 billion by 2029. These figures place the financial sector at the heart of the budget financing plan for the coming years. Messina, meanwhile, warns that reclassifying credit arising from the deferral of receivables will raise the level of risk borne by banks. Prime Minister Giorgia Meloni offered a different justification for the tax increase, calling it “a matter of fairness,” given difficult economic conditions and the high cost of living and interest rates. The contrast highlights the government’s goal of financing spending and the sector’s concerns about the effects of the tax and credit arrangements.
The Bank of Italy warned that the planned tax increases would raise uncertainty and affect investment decisions. It also said one provision could have a significant effect on banks’ 2026 profits. The warning adds a time dimension to the debate, as the measure could affect banks’ results before the 2027 budget begins, according to the Italian central bank’s assessment. Against the backdrop of the economy, Italy’s statistics institute kept its 2026 GDP growth forecast at 0.8%, after output was unchanged in the third quarter from the previous quarter. Seasonally adjusted industrial production rose 1.2% in September from August, but average third-quarter output fell 0.4% from the second quarter. Harmonized consumer price inflation also rose to 5.6% year over year in October, from 4.2% in September, according to a preliminary estimate.
Intesa Sanpaolo shares closed at 7.04 in the Nov. 11, 2026, session, according to EL7 daily data. That price is from the session before Reuters’ report, published on Nov. 12, and is not a closing price for the day the report was published. The European Central Bank is scheduled to publish its next Financial Stability Review on Nov. 18, 2026. The review provides an overview of potential risks to financial stability in the euro area, according to the ECB. There is no confirmation that the upcoming publication will address the Italian measures or Messina’s warning, but its date is the next scheduled milestone on the ECB’s calendar.