Domestic Policy
Mattarella: President of the Republic Sergio Mattarella visited Rebibbia prison, describing the conditions in many prisons as “unacceptable,” while acknowledging the value of cultural and educational activities within the institution. His visit was interpreted as a signal of concern over overcrowding, as associations and ombudsmen call for immediate measures pending the implementation of the prison reform plan.
Arms Decree: The government is considering postponing until the end of the year the decree on the new shipment of weapons to Ukraine, a decision reflecting internal divisions within the ruling coalition. The League supports a delay linked to diplomatic developments, while Forza Italia maintains a more favourable stance towards proceeding, emphasizing the need for continuity in support for Kyiv. Differences in approach are also emerging within the opposition, between the Five Star Movement and the Democratic Party.
Foreign Policy
Ukraine Conflict: US President Donald Trump warned Volodymyr Zelensky that Washington “does not want to waste time” on Ukraine, urging him to be realistic and raising concerns about elections and corruption in the country. Meanwhile, the United States and Europe are intensifying contacts to assess new mediation initiatives, with a meeting between Macron, Starmer, Merz and Trump focused on potential progress toward a peace agreement. Zelensky confirmed ongoing discussions with partners and the readiness of an updated draft outlining the future path for reconstruction and security.
Venezuela: María Corina Machado, leader of the Venezuelan opposition and Nobel Peace Prize laureate, fled Venezuela for Curaçao to avoid arrest, before heading to Oslo, where she did not arrive in time for the ceremony. Her daughter accepted the prize on her behalf, denouncing human rights violations under Nicolás Maduro’s regime. Meanwhile, US President Donald Trump announced the seizure of an oil tanker off the coast of Venezuela.
Economy and Finance
Budget Measures: In the context of the budget, the government confirms the elimination of double taxation on dividends, and to compensate for reduced revenues, plans to double the Tobin tax to 0.4% from 2026. Regarding short-term rentals, the flat tax rate will remain at 21% for primary residences and 26% for second homes, while from the third property onwards, corporate income tax will apply. The Council of Ministers is also preparing to introduce the “Milleproroghe,” extending deadlines for fines, Lep, youth bonuses, and legal protection for doctors. A €55 energy bonus for 2026 is also expected, targeted at low-income households, in addition to the social bonus.
Monetary Policy: The Federal Reserve cut interest rates for the third time in 2025, bringing them down to 3.50–3.75%, the lowest level in three years. For 2026, it forecasts a further reduction of 25 basis points. Since the start of the easing cycle, total cuts amount to six. The decision divided the board: nine members voted in favour and three against, highlighting internal tensions. Fed Chair Jerome Powell acknowledged the difficult balance between persistently high inflation and a weakening labour market.