Draghi Unveils Italian Reopenings in Bet on ‘Good Debt’
(Bloomberg) -- Prime Minister Mario Draghi said many business activities in much of Italy can resume starting April 26 as he bets on an economic rebound fueled by “good debt.”
Government and regional leaders on Friday decided to ease Italy’s lockdown, reintroducing so-called yellow risk areas where restaurants with open-air seating can reopen and residents have more freedom of movement, Draghi told reporters in Rome. All schools will reopen in medium-risk and lower-risk areas as the coronavirus contagion slows.
“This risk which the government has taken, which surely meets the expectations of citizens, is based on a premise: that those measures which govern behavior in reopened activities be scrupulously observed, including face masks and social distancing,” Draghi said. “This risk becomes an extraordinary opportunity not just for the economy, but for our social life.”
Draghi’s government said Thursday it expects a budget deficit of 11.8% and confirmed a lower growth forecast of 4.1% this year, with a target of 4.5% once stimulus and other measures are factored in.
Italy was one of the first countries hit by the coronavirus pandemic and its economy shrank by 9% last year. Draghi’s government approved a plan to increase borrowing by about 40 billion euros ($48 billion) to the keep the economy afloat as vaccinations accelerate. Italy has budgeted over 170 billion euros since the Covid-19 pandemic started.
“To use words I have used in the past, it is a bet on good debt,” Draghi said. “This means that investments will be financed.”
The premier said he expects “a very strong rebound in the next months and then we should settle on a path of growth,” adding that a priority will be to keep employment levels high.
The government is struggling to meet its latest target of 500,000 inoculations a day by the end of the month, which Draghi initially pledged to reach by mid-April. Delays in the delivery of shots and the review of blood-clot reports for the AstraZeneca Plc and Johnson & Johnson vaccines have further complicated the situation.
Health Minister Roberto Speranza, speaking alongside Draghi, said he saw no decrease in bookings for the AstraZeneca shots.
“We’re seeing requests for more information on AstraZeneca,” he said. “This vaccine is part of our strategy. We have set an age recommendation, but we have encouraging reports.”
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