ITALY (OBSERVATORY NEWS) — Italy will take measures totaling 3.6 billion euros, or 0.2% of gross domestic product, in the coming days to help transalpine businesses cope with the consequences of the coronavirus epidemic, announced Sunday the Minister of Economy Roberto Gualtieri.
In an interview with La Repubblica, Gualtieri explains that this sum is in addition to aid of 900 million euros already announced on Friday for the areas most affected by the epidemic.
The new measures will include tax credits for businesses that have experienced a 25% drop in turnover, other tax cuts and additional funds for health services.
Roberto Gualtieri says he is convinced that the European Union will accept this increase in the Italian deficit target. Eurogroup finance ministers are scheduled to discuss this by phone this week.
According to the Minister of Economy, Italy’s public finances are solid and the 2019 budget deficit will amount to 1.6-1.7% of gross domestic product, against an initial target of 2.2%. Official figures will be released on Monday.
Italy has a deficit target of 2.2% for 2020, with a growth forecast of 0.6%.
The government has not yet revised this growth forecast down, but some analysts believe an inevitable contraction.
The REF Ricerche research institute estimated this week that the current health crisis could reduce Italian GDP by 1 to 3% in the first half of 2020.
Italy is the main European outbreak of Covid-19 coronavirus, which appeared last December in China, with more than 1,100 confirmed cases and 29 deaths.
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