A new child benefit is intended to increase the birth rate in Italy and reduce costs for families.

The Italian government has now launched a legislative decree that provides for an income-related state grant that is due to all Italians.

The new child benefit is intended to replace various other grants and thus make the system simpler, but also more generous.

The new aid will cost 15 billion euros in the coming year, and by 2029 the expenditure will climb to 19 billion euros, according to the government's planning.

Family Minister Elene Bonetti called the decision historical: "This increases public spending for families by 50 percent".

Christian Schubert

Economic correspondent for Italy and Greece.

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Italy has the second oldest population in the world after Japan and has so far spent comparatively little on supporting families.

According to Eurostat, it was only 1.8 percent of gross domestic product (GDP) in 2017, compared to 2.3 percent in the EU average and 3.3 percent in Germany.

The Italian Ministry of Finance spoke of controlled cost increases, because at the same time existing family and child benefits would be reduced or combined.

The ministry emphasizes that the bottom line is that the increase in expenditure is only 6 billion euros.

This additional expenditure would hardly change the existing financial planning.

They would largely be financed by savings that have already been taken into account and to a small extent by deficits.

Funds from the EU reconstruction plan would not be used, it said.

According to the latest information, Italy expects new government debt of 8.9 percent of GDP this year, which is expected to fall to 5.6 percent in 2022.

According to current planning, Italy wants to have a deficit of 3.3 percent in 2024.

The government announced that total national debt will be around 155 percent of GDP this year.

610 euros for three children

The new child benefit has broad support in the government's multi-party coalition. Both the increase in donations and the planned simplification are welcomed. Unlike in Germany, the allowance is based on the amount of income. With a household income of a maximum of 15,000 euros per year, there should be a maximum of 175 euros per month for the first child and 610 euros for three children. With a household income of more than 40,000 euros, on the other hand, only 50 euros are earmarked for the first child. The details can still change in the upcoming parliamentary deliberations. The right-wing populist Lega party wants to ensure that only citizens who have been in Italy for ten years are entitled - not just two years, as the draft provides.

However, there are also warning voices in Italy.

The economist Veronica De Romanis from the Italian University of Luiss sees the danger that child benefit will only increase public spending, but not bring about any fundamental change.

In view of the high national debt, Italy could not afford that.

"Already in the past, the subsidies were increased, and yet the birth rate fell," she told the FAZ.

It would be more important to increase incentives for a higher female employment rate, which ensure a work-life balance, i.e. above all to increase the number of kindergarten places.