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Italy’s government will have to plan for additional borrowing this year to protect businesses and families from the fallout of Russia’s invasion of Ukraine, Agriculture Minister Stefano Patuanelli said.

“I think extra deficit spending today is more than justified and I believe it is necessary,” Patuanelli said in an interview on Radio 24. He added that the Cabinet is likely to discuss the matter “very soon.”

Prime Minister Mario Draghi’s government has spent about 16 billion euros ($17 billion) so far to cushion consumers from energy price hikes that started before the Russian invasion. It managed to do so without further widening the country’s deficit, but with no end in sight to the conflict and energy and supply-side shocks continuing, the government will likely need to engage in further fiscal spending.

The war in Ukraine has left European nations scrambling to live without Russian natural gas, which provides 40% of the region’s needs, and to deal with the impact on their economies from sanctions imposed on Russia to contain President Vladimir Putin.

While Italy’s economy bounced back from the pandemic last year with 6.6% growth, expansion is likely to slow in 2022, national statistics bureau Istat said last week. Spending on the pandemic had already widened the country’s mammoth debt to about 150% of output at the end of 2021.

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