ROME (ITALY) – The Italian government passed 25 billion euros (22.72 billion pounds) of extra spending on Wednesday. This was the third major move involving cash injection to bolster its battered economy since the start of the country’s coronavirus outbreak.
The new stimulus will include additional borrowing and take the 2020 budget deficit to 11.9% of national output, when compared with a goal of 10.4% set in April and a figure of 1.6% recorded in 2019. This was the lowest figure in 12 years.
Rome saw a rise in its public debt at 157.6% of GDP this year.
The prime minister’s office said in a statement after the cabinet approved the move at a meeting, “It is essential to continue to support the productive system and the income of citizens,” (1000 GMT).
The package will come to the aid of Italy, as it awaits more than 200 billion euros as grants and cheap loans from the European Union’s Recovery Fund, for which the approval was done by EU leaders this week.
Economy Minister Roberto Gualtieri told parliament that part of the extra spending would allow people to pay taxes in installments, rather than through a single payment now which is due in September.
An extension of the financing would be possible through the extra funds to be used for temporary layoff schemes for a further 18 weeks, a government source said.
About 180 billion euros has been set aside by the government, including state guarantees for bank loans. However, only part of this is likely to be spent.