February 27, 2021

Italy is confident in the flexibility of the EU if the coronavirus impacts its economy



The Italian Government is confident that Brussels allows some flexibility if the coronavirus impacts “significantly” on the economic growth of the country, as the main regions affected are Lombardy and Veneto, which represent a third of the gross domestic product (GDP).

The Deputy Minister of Economy, Laura Castelli, said in an interview on public radio that the European Union (EU) is equipped with the necessary resources to offer some margin to Italy in its deficit, if GDP is affected by COVID- 19.

According to government forecasts, Italy will grow by 0.6% in 2020 and will have a deficit of 2.2% of GDP.

“There are a number of resources that the EU could give us in relation to a series of economic events that could significantly penalize GDP,” he said.

“We hope not to reach that point. But this is one of the situations in which the EU should hold the countries. The talks are ongoing.”

The coronavirus in Italy has already left 283 infected, including seven deaths, and the cases affect eight Italian regions: Lombardy (north), with 212 infected, Veneto (north), with 38 cases; 23 in Emilia Romagna (north); 3 in Piedmont (north); 3 in Lazio (center); 2 in Tuscany (center); one in Sicily (south) and one in Alto Adige (north).

As a precautionary measure, schools and universities have been closed in the eleven most affected municipalities of Lombardy and Veneto, considered “red zone”, where controls have been established with military and law enforcement to prevent exits or entrances.

Factories have been closed and productive activity has been interrupted in part of these two regions, the economic engine of Italy, so experts predict that the consequences of this virus that originated in China can lead the country into a recession.

Italian Prime Minister Giuseppe Conte said on Monday that the coup in the economy can be “very strong” but gave no figures.

The Deputy Minister of Economy has advanced that the Government is talking with the employer to analyze what measures to take to mitigate the damage and prevent the “economic fabric suffer a slowdown.”

The Italian bank UniCredit, the largest in Italy by volume of assets and the second by market capitalization, announced Monday that it will grant a twelve month moratorium for the payment of mortgages to residents and companies with legal or operational headquarters in the eleven municipalities affected by the coronavirus.

Similar measures have been announced by the Carige bank, which was intervened in 2019 by the European Central Bank for its economic problems.

The entity has reported that it has mobilized 20 million euros for the granting of loans to affected companies and that both residents and companies that operate or have headquarters in the eleven municipalities of the “red zone” may request a three-month suspension of credit payments contracted, with the possibility of an additional extension of another three months in relation to the duration of the emergency.

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