Italy’s Draghi Vows More Economic Stimulus, Faster Vaccinations

Italian Prime Minister Mario Draghi vowed to free up more economic stimulus and increase vaccinations to offset a prolonged lockdown amid a coronavirus resurgence.

The premier, at his first news conference since his governing coalition was sworn in on Feb. 13, unveiled a 32 billion-euro ($38 billion) pandemic relief package he called “only a first step.” The package was approved at a cabinet meeting earlier Friday.

For the former head of the European Central Bank, the stimulus measures go hand-in-hand with accelerating a sluggish vaccination effort as he seeks to revive an economy that contracted by almost 9% last year.

Italy’s Draghi Vows More Economic Stimulus, Faster Vaccinations

Under Draghi and his predecessor Giuseppe Conte, Italy has allocated more than 130 billion euros to combating the economic fallout of Covid-19. That’s on top of an expected windfall of about 205 billion euros in European Union funding.

“It is a partial response, but it is the maximum we could do inside this framework,” Draghi said of the package, which will inject about 11 billion euros into the economy already in April and sets up a fund to finance vaccine production in Italy.

“The vaccination campaign is the basis for restarting the economy,” he said.

Draghi said he will seek a widening of the budget deficit -- he did not say how much -- to free up more spending.

“Now is not the time to look at debt levels,” he said. “This is not the year to ask for money, but to give money.”

The premier reaffirmed his objective of tripling daily vaccinations in Italy to about 500,000 in mid-April and said the plan is to exceed that pace in May-June. At its current pace, Italy will need an estimated 17 months to cover 75% of the population, according to the Bloomberg Vaccine Tracker.

Draghi, who said he will be vaccinated with the AstraZeneca Plc shot, signaled firmness against vaccine manufacturers who fail to respect delivery commitments, after Italy, with the EU, blocked an Astra consignment for Australia.

“We have done it and we will continue to do it,” he said in reference to blocking exports. Asked about the EU’s possibly targeting ofthe U.K., he said, “This is not so much toward the U.K., but refers to the lack of respect of accords.”

Draghi left the door open for Italy to act unilaterally on vaccine procurement. Coordination at EU level was fine for economic and many other issues, he said.

“But this is health, so if European coordination works, we follow it. Otherwise we need to go it alone,” he said. “This is pragmatism.”

Italy, the euro area’s third-biggest economy after Germany and France, plans to reach 80% vaccine coverage by the end of September.

Italy has administered 7.3 million vaccine doses, with only 3.8% of the population fully immunized. With more than 3.3 million Covid-19 cases and more than 100,000 deaths since the beginning of the outbreak last year, it’s among the hardest-hit countries in Europe.

©2021 Bloomberg L.P.

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