Italy to pass new stimulus package after virus deaths jump

by BLOOMBERG

Italy’s government will meet Monday to pass a new package of measures including increased spending for its stricken healthcare sector and moves to cover extraordinary layoffs after deaths in the country from the coronavirus jumped by 368 Sunday.

Premier Giuseppe Conte said the country will need a “recovery plan” as the new package won’t be enough to sustain the economy, according to an interview with daily Corriere della Sera. Damage from the virus to companies will be “serious and widespread,” he said.

Conte’s cabinet, which has pledged to spend 25 billion euros ($28 billion) on stimulus measures to aid an economy under a nationwide lockdown, will convene at 10 a.m. in Rome to approve the package, according to the government website.

Italy has the world’s second-highest number of diagnosed cases, with about 25,000 known infections and more than 1,800 deaths, with an increase of over 25% Sunday. Conte told Corriere the country has not yet reached the peak of its exposure to the virus. He’s also seeking a more coordinated response from other European leaders.

The decree will allow companies to hold annual general meetings virtually for a period running into the summer, according to a draft seen by Bloomberg News. Other items include:

  • Stepped up spending for the health-care sector.
  • Measures to cover extraordinary redundancies related to coronavirus.
  • Payments to offset costs of childcare.
  • Postponement of some tax deadlines including value added tax.
  • Suspension of mortgage payments for some workers, including autonomous ones.
  • Additional funding for the airline sector following a collapse in travel.
  • State guarantees on bank financing and loans to firms to boost liquidity amid the emergency.

Measures also include a package of loan guarantees to avoid a credit crunch. 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 500 million-euro Treasury fund.

Fiat Chrysler SpA’s FCA Italy and Maserati units will suspend production at six locations in Italy and one each in Poland and Serbia, the company said Monday. The halt will be in effect through March 27.

Conte’s cabinet is seeking agreement on the plan after unions and business representatives signed an accord to protect workers in a bid to keep at least some production up and running. Conte’s office declined to comment.