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Italy's parliament approved the 2026 budget on December 30, 2025, with a vote of 216 to 126, focusing on medium-low incomes and including approximately 22 billion euros in new measures. Economy Minister Giancarlo Giorgetti stated that no funds were diverted from social spending to defense, emphasizing that discussions on arms spending will occur in Spring 2026, contingent on Italy's compliance with EU deficit rules.

The budget raises the second band of the IRPEF income tax from 35% to 33% and introduces extra levies on banks and insurers totaling around 4.4 billion euros. The government aims to reduce the deficit-to-GDP ratio to below 3% by 2026, with expectations from the European Commission for a 2.8% ratio. Giorgetti highlighted wage increases exempt from taxes and a commitment to support healthcare, education, and families while addressing pension regulations.