Italy’s Debt Will Grow by 20 Billion Euros to Finance Covid Aid
Italy’s Debt Will Grow by 20 Billion Euros to Finance Covid Aid
(Bloomberg) -- Italy’s government will seek parliamentary approval for 20 billion euros ($24 billion) of extra deficit on Thursday, according to people familiar with the matter.
A cabinet meeting will sign off on the request, the people said asking not to be named discussing plans that will enable the virus-battered to further expand its public debt as soon as this year. Parliament might vote on the request as early as Nov. 25.
The euro area’s third largest economy is struggling to finance relief measures for business and families hurt by the pandemic. Two emergency decrees tried to soften the blow for businesses forced to shut down but Italy only has enough money to cover the cost of stimulus for the month of November.
Current measures “aren’t enough,” Prime Minister Giuseppe Conte said on Wednesday speaking to an event organized by Italy’s restaurants and bars association, one of the hardest-hit industries.
The pandemic “requires sustained financial support, on a larger scale than what has been done so far,” he added.
The additional debt comes on top of a 38-billion-euro draft budget law for 2021-23 and of 100 billion euros of stimulus deployed since February. The finance ministry estimates that each month of lockdown costs between 6 and 10 billion euros in relief measures and lost revenue. A spokesman for the government didn’t immediately respond to a request for comment.
The European Commission on Wednesday said that some of Italy’s budget measures “do not appear to be temporary or matched by offsetting measures,” and therefore require regular review to ensure their fiscal sustainability.
©2020 Bloomberg L.P.