(Bloomberg) -- Italian premier Giorgia Meloni and her coalition are seeking to fill a €12 billion-euro ($13.4 billion) budget hole with measures such as cost cuts and delayed retirement, according to people with knowledge of the matter.

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Overshadowing a back-to-work meeting of the ruling alliance’s party leaders on Friday is the need to find about €25 billion for 2025, with only about half that amount currently available, said the people, who declined to be identified because the discussions are private.

Decisions reached at the coalition’s first big gathering after the summer break will lay the groundwork for a budget for next year. Finance Minister Giancarlo Giorgetti has until Sept. 20 to deliver a fiscal plan to Brussels that puts Italy on track to narrow a deficit noticeably above the European Union’s 3% limit.

The Finance Ministry said in a statement it will deliver the plan by mid-September and that any hypotheses about the contents of the plan circulating in the media are premature.

Since taking power in 2022, Meloni’s government has pursued broad restraint accompanied by loosening of the public finances, overseeing some solid economic growth while narrowing the spread between Italian and German bonds to a two-year low in March.

Complying with the EU’s newly revamped fiscal rules make that balancing act more complex. The 2025 budget will therefore be a test of how well the alliance can keep promises to voters, while avoiding tensions within its ranks and repairing the public finances.

Coalition partner and League party leader Matteo Salvini has already complicated the task for Meloni by vowing that the government will renew a cut in the tax wedge — the difference between costs paid by the employer and the net pay given to employees — at a cost of €10 billion. A finance ministry official confirmed that the measure is now planned.

Other coalition promises that might need to be kept include a reduction in tax brackets, estimated to cost about €4 billion, and a series of tax breaks for young people, working women, mothers and the poor.

But while Salvini told reporters in the Adriatic town of Rimini last week that the government is ready to do “even more, compatibly with available resources,” those resources are proving hard to find, the people said.

Incentives to delay retirement for some categories of workers who are allowed to stop working before the standard age of 67 are being discussed, they said. The people added that ministries may be asked to double the €2 billion in savings through cost cuts currently envisaged.

The outcome for Giorgetti will be a draft structural budget plan due this month where Italy will commit to the EU to stick to a spending ceiling for the next four years as it tries to tame a debt load that the government predicts to peak at close to 140% of gross domestic product in 2026. Scrutiny from ratings companies will follow in subsequent weeks.

Italy’s Timetable

While trying to placate the bloc and correspondingly reassure investors, Meloni is also dodging bullets from within her own alliance. Tensions periodically flare up between Salvini and her other coalition partner, Antonio Tajani, who leads the Forza Italia party that was once led by the now-deceased former premier, Silvio Berlusconi.

The two men recently clashed over the question of who can become an Italian citizen, with Tajani supporting an opposition-sponsored measure to allow naturalization for individuals who have completed most of their education in the country.

That disagreement highlights how distant the coalition partners are on a range of issues from immigration to spending, forcing Meloni to constantly mediate.

--With assistance from Flavia Rotondi.

(Adds statement from Italy’s Finance Ministry in the fourth paragraph.)

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