Italy has approved a new stimulus package aimed at helping businesses and families survive the coronavirus crisis, while Rome waits to receive funds from the European Union’s Recovery Fund.
The government would use the extra spending, worth 25 billion euros ($29.5 billion), to soften the blow to an economy ravaged by lockdown measures imposed to stem the Covid-19 pandemic, which has killed almost 35,200 people.
Italy hopes to front-load this year part of 209 billion euros in grants and cheap loans it should receive from the Recovery Fund starting in 2021.
The Italian economy has been among the worst hit by the crisis, facing an 11.2% contraction this year, according to European Union estimates, the sharpest fall in the 27-nation bloc.
“We have set aside 12 billion euros to support employment,” Prime Minister Giuseppe Conte told reporters after a three-hour Cabinet meeting.
Part of the borrowing will be used to conditionally extend temporary layoff schemes for up to 18 weeks, with firms required not to cut jobs to qualify for state aid.