Italy allocates 7.5 billion to mitigate the effects of the coronavirus and calls for greater flexibility to the EU

Italy will allocate 7.5 billion euros to curb the impact of the coronavirus on the economy of the transalpine country, which already has more than 3,290 infected people and 148 dead , according to the latest balance.

The Minister of Economy, Roberto Gualtieri, has confirmed that these extra resources will mean an increase of the deficit for 2020 of approximately 0.3%, so the Government will ask the EU for more flexibility to cope with the epidemic. "We are not taking a leap into the void and can already declare full sensitivity on the part of the European Commission, which includes the emergency that Italy is going through. From this point of view, we do not expect any divergence with the EU," he said during a press conference following a council of ministers.

Gualtieri has appeared with the Prime Minister, Giuseppe Conte, who has announced that in the coming days a new decree will be approved that will contain "extraordinary and urgent measures" to support families and businesses that are facing the emergency, "which is not only sanitary but also economic ", and that will be financed with this deviation from public spending.

The Minister of Economy announced that with the new decree more resources will be allocated to civil protection, law enforcement and public health; the moratorium on credits for companies affected by the crisis will be allowed; and benefits for temporary dismissal will be introduced. "No one should lose their job because of the coronavirus," Gualtieri said.

The Government also studies aid aimed at parents who have to stay at home to take care of their children, after yesterday ordered the closure of colleges and universities across the country until March 15 to stop the expansion of Covid -19.

Italy has already passed a first decree with urgent economic measures that included tax exemptions and the suspension of some bills for citizens and businesses of the so-called 'red zone', the 11 municipalities in northern Italy considered the epicenter of the outbreak where 50,000 remain isolated people for two weeks.

Gualtieri said that Rome had already sent a letter to the Vice President of the European Commission, Valdis Dombrovskis , and to the Commissioner of Economy, Paolo Gentiloni, in which he urged the EU to "respond" to this emergency allowing a more flexible application of the Covenant of Stability "We are convinced that raising the tax burden to cover the cost of the emergency package would aggravate the risks for the Italian economy and damage the climate of trust at a very delicate time," writes the finance minister in the letter.

The European Commissioner for Economy, Paolo Gentiloni, has advanced that the EU will accept an increase in the budget deficit to finance the measures approved by the Executive. Also the president of the Eurogroup, Mário Centeno , announced yesterday the activation of the "flexibility clauses" after speaking with the finance ministers of the euro zone. The Italian opposition and unions consider, however, that the amount announced by the Government to deal with the economic emergency is insufficient.

Italy, the third economy of the euro zone, has a public debt of over 135% of GDP and its growth suffered a contraction of 0.3% in the fourth quarter of 2019. The Bank of Italy estimates that the impact of the coronavirus on the Transalpine economy could amount to 0.2% and drag the country into recession, taking into account that the regions most affected by Covid-19, Lombardy, Veneto and Emilia-Romagna, together produce 40% of national wealth.

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