Italy Doubles Stimulus to Fight Virus Fallout to $8.4 Billion

Italy will double the amount planned to help contain the impact of the coronavirus outbreak on the economy to 7.5 billion euros ($8.4 billion.)The announcement marks a dramatic escalation in the government’s response, which has so far included measures such as a nationwide closure of schools and a ban on public events.

With its economy already at risk of recession before the outbreak, the crisis has all but paralyzed business activity in the country’s rich northern regions — home to major companies including carmaker Fiat Chrysler Automobilies NV. It has also piled more pressure on the country’s fragile governing coalition, with partners demanding ever-higher spending.

The funds will be used to “help families and businesses tackle this emergency which is not just a health one but also an economic one,” Prime Minister Giuseppe Conte said at a joint press conference with Finance Minister Roberto Gualtieri in Rome Thursday. “No one must lose their job because of the coronavirus,” Gualtieri said.

The extra spending will lead Italy to break its budget deficit commitments by 6.35 billion euros, or 0.35 percentage point of gross domestic product. Italy is already in talks with the European Commission to be granted the necessary flexibility. “We listen to the European Commission constantly, we are not making a leap in the dark,” Conte said. “We can already say the Commission is willing to move toward us and understand the emergency.” Details of the stimulus program will be presented next week, and will have to receive parliamentary approval, according to the finance minister.

Italy Doubles Stimulus to Fight Virus Fallout to $8.4 Billion, Bloomberg, Mar 5