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Italy Goes Into Nationwide Lockdown as Virus Numbers Spiral

The Italian government took the decision after the death toll edging towards 500. 

Italy Goes Into Nationwide Lockdown as Virus Numbers Spiral
An empty tram carriage passes through Milan, Italy. (Photographer: Ginamarco Maraviglia/Bloomberg)     

(Bloomberg) -- Italy has become the first country to attempt a nationwide lockdown to stop the spread of the highly infectious coronavirus.

The death toll from the virus, which is on the cusp of turning into a pandemic, is edging toward 500. Italy’s prime minister has called this the country’s “darkest hour,” inviting comparisons to the U.K. during World War II. The effects, both psychological and economic, could be devastating as the government struggles to contain the damage.

“We need to change our habits right now,” Prime Minister Giuseppe Conte said at an unscheduled news conference Monday evening. He ordered the nation to “stay at home” as he explained that “we are forced to impose sacrifices.”

Italy Goes Into Nationwide Lockdown as Virus Numbers Spiral

The business community appeared to rally around the prime minister on Tuesday. Marcella Panucci, director general of employers lobby Confindustria, said in an interview with Bloomberg TV that the full lockdown was justified. “We fear a shock on credit,” she warned, calling on the government to offer guarantees and investment to shore up an economy under siege.

The government will seek to ease the credit burden on citizens as a result of the lockdowns, Deputy Finance Minister Laura Castelli said in a radio interview. Rome is studying temporary layoff payments, and will work on tax and payment relief measures as well as mortgage relief with banks, she said.

Italian bonds extended their rally, with 10-year yields down 11 basis points to 1.32%. The benchmark FTSE MIB stock index rose as much as 3.1% in Milan.

Less than 48 hours after announcing drastic steps in the region around Milan, Conte is now moving to widen restrictions by decree to an entire population of more than 60 million. The initiatives in the north had appeared to yield limited results, as people are still able to move around freely.

“All of Italy is now closed,” Milan daily Corriere della Sera wrote on its front page Tuesday. “Everyone at home,” Rome-based la Repubblica wrote.

Italy Goes Into Nationwide Lockdown as Virus Numbers Spiral

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Now that Conte has sounded a global alarm, questions linger about the enforceability in Western economies of the kind of draconian measures needed to limit the number of people getting infected. The country’s health system is on the brink of collapse -- and the obstacles Italy is up against in practical terms are much greater than what China carried out in part of the country.

Chinese authorities didn’t impose travel restrictions nationwide, instead training their focus only on on the most-impacted province, Hubei in the country’s center. It locked down a handful of cities -- including Wuhan where the pathogen is thought to have originated -- stopping air and rail travel and restricting those who could leave by car.

The measures, which started in late January, saw more than 60 million people effectively locked in, and remain in place.

The move restricted the virus largely within Hubei, causing cases in the region to multiply dramatically throughout February and stretching medical resources. Hubei set up temporary hospitals in gymnasiums and auditoriums, and people waited for hours in order to be tested or treated. The outbreak was more manageable across the rest of the country.

The impact of Italy’s national lockdown won’t become clear for at least a month, Giovanni Rezza, head of the infectious diseases department at the Superior Health Institute told Corriere della Sera. “What matters more than government measures is how individuals behave. People haven’t realized how much they’re at risk.”

Italy Goes Into Nationwide Lockdown as Virus Numbers Spiral

In Italy the situation appears as follows: Schools and universities will be closed nationwide, all public events will be canceled and Italians won’t be allowed to travel without a business or health-related justification until April 3. Conte’s decision came after the number of cases in Italy soared by 25% to 9,172 on Monday as reported deaths jumped to 463 from 366.

​Italy’s Finance Ministry said Monday that the country is better off taking a short-term economic hit now to prevent a wider economic crisis. The government has amped up spending to 7.5 billion euros ($8.5 billion) to help cushion the economic impact of the virus.

The government may increase the value of the package, including more health measures and relief for businesses and families, to about 10 billion euros, according to a deputy minister and two other officials who asked not to be named discussing confidential deliberations.

--With assistance from Emma O'Brien and Marco Bertacche.

To contact the reporters on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net;John Follain in Rome at jfollain2@bloomberg.net

To contact the editors responsible for this story: Chad Thomas at cthomas16@bloomberg.net, Jerrold Colten, Ross Larsen

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