Italy’s Government Approves $38 Billion Stimulus Package

Italian Prime Minister Mario Draghi said a 32 billion-euro ($38 billion) pandemic relief package for businesses approved on Friday will be followed by further stimulus for the economy.

“This is only a first step,” Draghi said during his first news conference since his governing coalition was sworn in on Feb. 13.

A cabinet meeting led by Draghi, a former European Central Bank president, backed the so-called support decree on Friday, part of a broader effort by the government to shore up the country’s finances.

“It is a partial response, but it is the maximum we could do inside this framework,” Draghi said.

The new package will quickly inject about 11 billion euros into the economy in April and also sets up a fund to finance vaccine production in Italy.

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 a windfall of about 205 billion euros in European Union emergency funding.

The government is expected to provide yet more support to the ravaged economy to offset the hit from restrictions on movement and activity. Italy’s output shrank by almost 9% in 2020 and public debt reached 156% of gross domestic product at the end of last year.

Draghi pledged on Thursday to accelerate the vaccination campaign, a drive he is banking on to defeat the coronavirus and restart the economy. Italy plans to triple the pace of inoculation to half a million people per day by mid-April, reaching 80% 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, Italy is among the hardest-hit countries in Europe.

©2021 Bloomberg L.P.

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