Italy Approves Virus Relief From Alitalia Takeover to Babysitters

(Bloomberg) --

Italy approved a 25 billion-euro ($28 billion) package to soften the economic impact of the coronavirus outbreak with measures ranging from the nationalization of airline Alitalia to funds for babysitters and guarantees for banks.

The official decree hadn’t been published almost 24 hours after the cabinet met to approve the package, but Premier Giuseppe Conte’s office revealed some of the key measures overnight:

• A new company controlled by the Italian treasury to take over bankrupt airline Alitalia
• A 5 billion-euro package of loan guarantees and funds to avoid a credit crunch
• Parents to get up to 15 days off at 50% of salary to take care of their children while schools are closed, or they can request as much as 600 euros to pay for babysitters
• Funding for 20,000 new hires in health sector
• National emergency fund boosted by 1.7 billion euros
• Extra funding for more beds in intensive care
• State retains authority to seize hotels, other buildings for medical care
• Support for temporary layoffs
• A 600-euro monthly subsidy for 5 million workers including those who are self-employed
• Moratorium on loan repayments for small and medium-sized businesses, including mortgages
• Boost to state guarantee fund for small and medium-sized businesses, also for renegotiating existing loans

Finance Minister Roberto Gualtieri said a further economic stimulus package will be approved next month. La Stampa reported Tuesday that it could be worth 20 billion euros to 30 billion euros.

The plan will “leverage” about 340 billion euros in financing, Gualtieri told reporters at an appearance alongside Conte in Rome on Monday.

Guarantees apply to new and existing loans, a finance ministry spokesman said late Monday. Most of the funds will be used to freeze loan repayments to small and medium-sized company until Sept. 30, while a state guarantee fund for small and medium enterprises will be boosted by 1 billion euros and state lender Cassa Depositi e Prestiti will be allowed to guarantee at least 10 billion euros in loans through a new Treasury fund.

Italy has the world’s second-highest number of diagnosed coronavirus cases, with about 28,000 known infections and more than 2,100 deaths.

The measures outlined Monday include 3.5 billion euros in spending for the health sector, state underwriting for a portion of companies’ property rental costs, subsidies for the self-employed and a nine-month mortgage relief plan for self-employed and other non-salaried workers who’ve seen their earnings fall by more than a third during the virus crisis.

Conte’s government is confident it has support from the European Commission for its stimulus package. Gualtieri said fellow finance ministers from the euro area will follow Italy’s approach on income and liquidity support, delaying tax payments and providing support for investments.

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