(Bloomberg) -- Italy has approved an aid package worth several billion euros to further cut taxes and finance the purchase of gas, as the government seeks to shield its economy from a spike in energy prices.
The package approved by Mario Draghi’s cabinet Thursday includes measures to support long-term contracts for gas imports, a tax cut on energy bills and a 4 billion euro ($4.2 billion) loan to energy market operator GSE to speed up the filling of gas storages ahead of next winter, according to a government statement.
Draghi told reporters after the cabinet meeting that gas storages “are definitely a concern.” But he added that progress in filling storages was good, currently between 50% and 60% of total capacity. “We’re confident we’ll reach our target” by end-November, a reference to a 90% objective, Draghi said.
Draghi did not give a figure for the value of the aid package. The measures being readied were worth as much as 8 billion euros, people familiar with the matter said before the cabinet met.
Read More: Italy Readies Up to 8 Billion Euros in New Energy Relief
The cabinet meeting took place amid rising coalition tensions, with Draghi facing opposition from the Five Star Movement’s leader Giuseppe Conte.
Draghi rushed back to Rome on Wednesday, abandoning a NATO summit in Madrid to chair the cabinet meeting. Conte, a former premier who now heads Five Star, is struggling to keep the party intact after Foreign Minister Luigi Di Maio left it to create a new political group.
Both Draghi and Conte have met President Sergio Mattarella recently to update him on the coalition tensions. Italian presidents mostly hold a ceremonial role, but are highly-involved during political turmoil as they can dissolve parliament and trigger a general election.
The League, reeling from a poor showing in local polls over the weekend, has already criticized some of Draghi’s reforms. Matteo Salvini’s party may now feel the need to dig in harder against Draghi in a bid to rebuild support among disgruntled voters.
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