How Fake News Is Poisoning Italy’s Budget Debate
Italy’s media have fixated on the false claim that the 2026 budget “favours the rich,” instead of scrutinising what the document actually contains. A commentary by Lorenzo Bini Smaghi
Italy has spent the past week in an uproar over the draft 2026 budget presented by Giorgia Meloni’s government. Although the document had been available for days on the Ministry of Economy’s website, major Italian newspapers only picked it up after the testimony of several independent authorities — notably the Bank of Italy — prompting headlines such as “the budget helps the rich.”
Only then did the political storm break. Opposition parties leveraged on the reputation of the central bank to accuse the government of favouring wealthier households: “It’s not us saying it — the Bank of Italy says so!”
The government countered that “someone earning €45,000 a year is not rich,” while some commentators took the opportunity to launch attacks on the Bank of Italy itself, running headlines such as “Golden salaries and red bureaucrats” and accusing the institution of “neo-communism, Mamdani style.”
How is it possible that the Bank of Italy — a central bank whose independence is a cornerstone of its history — ended up at the centre of such a heated political clash? A legitimate question, yet scarcely anyone bothered to ask it.
Such are the times: a newswire flash, a tweet or a banner headline is enough to turn an assertion into “truth,” with no need for verification — even when, as in this case, the evidence is plainly written in a public document.
The full text of the testimony by Fabrizio Balassone, head of the Economic Research Department at the Bank of Italy, delivered before the Joint Budget Committees of the Italian Parliament, had in fact been available on the central bank’s website from the outset.
From its twenty pages, several points emerge clearly.
First, the word “rich” (or anything remotely similar) does not appear once. The testimony merely describes the effects of the personal income tax (Irpef) reduction: taxpayers with incomes above €28,000 would benefit, up to a maximum of €440 per year for incomes of €50,000 or more. For incomes above €200,000, the benefit decreases and may disappear entirely.
There is no value judgement, no attempt to define who counts as rich or poor.
Moreover, the testimony explicitly notes that the measure follows earlier reductions in taxes and social contributions introduced in recent years, “predominantly in favour of lower-income households.”
It also concludes that the budget’s overall measures do not materially alter income distribution among households. Tax cuts benefiting the upper-middle brackets are broadly offset by social assistance measures targeted at the bottom two quintiles of the income distribution.
In short, nothing in the Bank of Italy document supports the claim that the budget “favours the rich.”
The entire debate, therefore, was conducted around nothing.
What is far more worrying is what has not been debated: the substance of Italy’s most important economic policy document of the year, which could have benefited from serious scrutiny as it heads into parliamentary discussion.
The hearings did, in fact, raise several meaningful issues.
To begin with, the main funding sources for the expansionary measures — the Irpef cut and higher spending — rely on one-off revenues, such as temporary taxes on banks and insurance companies, and on the reprogramming of the National Recovery and Resilience Plan (PNRR), the EU-funded investment package. The uncertainty surrounding future financing weakens the effectiveness of these measures.
A first version of this article was published in the Italian daily Il Foglio
IEP@BU does not express opinions of its own. The opinions expressed in this publication are those of the authors. Any errors or omissions are the responsibility of the authors.
