Italy Approves 40 Billion Euro Package to Support Economy
Italy Approves 40 Billion Euro Package to Support Its Economy
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Italy has approved a 40-billion-euro ($49 billion) stimulus package that extends economic support for businesses and families hurt by Covid-19 restrictions.
Prime Minister Mario Draghi said that the measures will support Italy’s economic rebound as vaccinations accelerate and the pandemic slows down. But he added that the more than 200 billion euros of the European Union’s recovery fund are necessary to significantly boost the country’s growth potential.
The package allocates 17 billion euros for companies and self-employed workers, 9 billion euros to provide credit and liquidity for struggling businesses and 4 billion euros to workers in industries most-hit by the crisis.
It also extends emergency income, boosts cash contributions for seasonal and tourism sector workers, and cuts taxes for young people buying their first home. Additionally, it sets up a special fund, initially worth 50 million euros, to support scientific research.
“These are important measures,” Carlo Bonomi, head of Italy’s Confindustria employers’ association said at an event in Rome on Thursday. “What is missing is that we are still in the support and emergency phase and not enough on measures that will push the recovery, we need to accelerate on that front.”
The funds included in the new package will be financed with extra deficit spending already approved by the administration. Italy’s total government outlays on stimulus since the beginning of the pandemic has surpassed 170 billion euros, pushing debt to almost 160% of output. The economy shrank 8.9% last year due to lockdowns.
“If the pandemic situation continues to improve, we won’t need further support measures this year,” Draghi said at a press conference in Rome on Thursday.
Earlier this week, the government announced plans to phase out the curfew currently in place, seeking to completely remove it on June 21, and announced a timeline to reopen businesses.
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