Italy Readies Emergency Cash for Workers in Underground Economy
Italy Readies Emergency Cash for Workers in Underground Economy
(Bloomberg) --
Prime Minister Giuseppe Conte is preparing an unprecedented emergency handout for workers trapped in Italy’s underground economy, as his government seeks to stave off the risk of social unrest during a nationwide lockdown.
Conte is expected to host a cabinet meeting on Wednesday or Thursday to approve a new request to parliament for a wider budget deficit, paving the way for a second stimulus package worth at least 30 billion euros ($33 billion), according to officials who asked not to be named discussing administration strategy. Italy’s initial package was worth 25 billion euros.
The government is assessing emergency relief for the country’s hardest-hit workers which may be worth 600 euros a month, valid for the duration of the lockdown period, the officials said. The new measure would apply to some 500,000 households linked to the underground economy, with one official saying the country would risk a revolution if citizens went hungry.
Preventing social unrest in the underdeveloped south has become the government’s top priority. Police have been deployed on the streets of Sicily’s capital, Palermo, amid reports gangs are using social media to plot attacks on stores. As the state struggles to come to terms with the virus pandemic, officials have said they’re worried organized crime may be preparing to step in.
New measures to protect the economy will include support for temporary layoffs and moves to speed liquidity to companies and unlock state investments, the officials said. One such investment is 109 billion euros earmarked for railway infrastructure manager RFI and state-owned road operator ANAS, they said.
Parliament may vote on the request for a wider deficit early next week, with the cabinet approving new stimulus measures later that week, the officials said.
Conte is pushing ahead with even more spending despite the fact that the virus, following years of economic weakness, has left Italy dependent on EU support to maintain financial stability. ECB bond purchases are helping keep the country’s borrowing costs down while Conte negotiates with EU leaders on how to structure financial aid for the longer term.
©2020 Bloomberg L.P.