Italy finally approves economic stimulus package in virus fight

(C) Reuters. FILE PHOTO: Italian Prime Minister Giuseppe Conte attends a session of the lower house of parliament on the coronavirus disease (COVID-19) in Rome

ROME (Reuters) – The Italian government has approved a long-delayed, 55-billion-euro ($59.6 billion) stimulus package aimed at helping firms and families overcome the coronavirus crisis, Prime Minister Giuseppe Conte said on Wednesday.

Conte had promised to introduce the measures last month, but repeated rows within his increasingly shaky coalition over various aspects of the decree, which runs to almost 500 pages, led to repeated holdups.

“We have worked on this decree aware that the country is in great difficulty,” Conte said following a cabinet meeting. “It provides the prerequisites so that this phase of reopening can already offer the prospect of economic and social recovery.”

Rome has forecast that the economy will contract by at least 8% this year as a result of the COVID-19 epidemic, which has so far killed 31,106 people in Italy — the third highest death toll in the world after the United States and Britain.

The stimulus decree, which follows an initial 25-billion-euro package introduced in March, includes a mix of grants and tax breaks to help firms ride out the downturn. It also offers various handouts to families, including subsidies for childcare and incentives to boost the ravaged tourism sector.

The Treasury has predicted that the extra spending, coupled with a collapse in tax revenues, will shunt the budget deficit to 10.4% of gross domestic product this year, while public debt was seen surging some 20 percentage points to 155.7% of GDP.

Full details of the decree were not immediately available, but a draft seen by Reuters showed that the government had earmarked a further 15 billion euros to fund temporary lay-off schemes to enable firms to furlough rather than shed staff.