Italy Readies 10 Billion Euros of New Subsidies to Support Jobs

The Italian government is planning to allocate about 10 billion euros ($12 billion) to extend support for the labor market as officials weigh new restrictions on activity to counter a surge in coronavirus cases.

The new jobs plan will be part of a 32 billion-euro package -- the first drafted by Prime Minister Mario Draghi’s administration -- which could be ready as early as this week, according to people familiar with the matter.

The funds would be used to extend a ban on redundancies in the services sector until the end of the year and to finance other measures including furloughs, the people said. A spokesman for the Treasury declined to comment.

Italy’s government is looking at tightening coronavirus restrictions following an acceleration in cases driven by the spread of new variants. Daily infections reached a three-month high last week, pushing total cases above 3 million, and the death toll passed 100,000 people on Monday.

The new decree is expected to allocate about 2.5 billion euros to boost the government’s vaccination campaign, according to a draft seen by Bloomberg News. Health Minister Roberto Speranza said Sunday that the government is aiming to provide inoculations for all Italians who want them by summer, though only 2.7% of the population has been fully vaccinated so far.

The aid package will also include measures to help families, with schools closed again in several parts of the country.

Italy has allocated more than 130 billion euros for economic stimulus -- including Draghi’s new package -- but the government is expected to provide more support to its ravaged economy in coming months due to the impact of more restrictions. Output shrank by almost 9% in 2020 and public debt reached 156% of gross domestic product by the end of last year.

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