In response to rising living costs, the government is rolling out targeted financial support and tax relief intended to shield households from inflation. A 200 euro check is being issued to eligible families whose income is at least 27,000 euros and whose assets do not exceed 75,000 euros. At the same time, a temporary VAT reduction is implemented for six months, cutting the rate on most goods from 4% to 0%, with a 10% reduction applied to basic necessities and to items like oil and pasta. These are two of the main pillars in the third disinflation package announced by the prime minister, following the last Council of Ministers meeting before yearinish. Additionally, agricultural policy support is being expanded to help farmers cope with higher fertilizer costs, aiming to keep consumer prices steady.
Officials state that the government will guarantee these VAT discounts and provide direct, immediate assistance to farmers to ensure that savings are passed through to food prices. The decree imposes an obligation to reflect the reduced costs in retail prices, with the prime minister affirming that the measure will be binding in practice. The plan is designed to reach more than 4.2 million families, according to the head of government, who notes that the program will be implemented as soon as possible.
Although energy prices have moderated recently, food prices continue to climb in many areas. The latest data from the national statistics institute show a marked rise in everyday goods, with food prices up by about 15 percent year over year. Increases are observed across staples such as milk, which has risen sharply, as well as edible oils and eggs, with price changes also visible for flour, butter, and sugar. Analysts point to supply chain pressures and currency effects as contributing factors to the ongoing inflation in consumer essentials.
Extending relief for fuel costs
The current policy moves come after a controversial debate sparked by a public statement from the government’s third vice president earlier in the summer. The vice president urged retailers to design shopping carts containing cheaper essential items, a proposal that drew swift pushback from the broader food industry and from the agriculture ministry. The administration now seeks to balance consumer affordability with the interests of producers and distributors, aiming to preserve market stability while providing tangible relief to households at the checkout.