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Here’s what Italy’s new financial decree means for businesses

The Italian government on Tuesday announced a new €400 billion financial aid package to help businesses through the national shutdown. Here's a look at what the measures are and how they work.

Here's what Italy's new financial decree means for businesses
A dummy stands in the window of a closed shop in Asti, northern Italy. Photo: AFP

Almost all businesses in Italy have been shut down by government lockdown measures aimed at stopping the spread of the coronavirus. All non-essential businesses will remain closed until at least 13 April, after which the government may start to loosen regulations.

There have been widespread fears that many of the businesses which closed due to the measures may never be able to afford to reopen, with many pushed to the brink of bankruptcy.

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Italian Prime Minister Giuseppe Conte told the nation in a television address on Monday night that the measures represented “the most powerful intervention in the country's history”.

The programme will add to the €340 billion in government-backed loans announced last month.

State-backed bank loans

Bank loans, available to companies of all sizes, will be protected by the state up to a total of €750 billion.

The measures cover 100 percent of possible losses on loans of up to €25,000, and 90 percent on loans above that.

The package is made possible by the loosening of European Union regulations on state aid to companies. It aims to keep credit flowing into the economy, without forcing losses onto banks because of the additional risks they assume due to the shutdown, Reuters reports.

Shuttered market stalls in Rome. Photo: AFP

Conte said half of the new package will be earmarked for export-oriented companies whose turnover has imploded over the past month.

No aid will be given to companies that pay out dividends.

Foreign takeovers blocked

The prime minister also announced an expenasion of the so-called “Golden Power” rule, which aims to block foreign takeovers of Italian companies during this time.

The block has been extended to cover many more sectors, including banks, insurers, energy and healthcare.

The rule means any company based outside of Italy looking to take a stake of over 10 percent, and worth more than a million euros, in an Italian company would be blocked.

Schools and emergency services

Monday's decree also contains measures to help schools managing the emergency, including funding to hire 4500 teachers.

It also provides for 450 million euros in funding for the emergency services.

The latest emergency financial decree was announced as the country enters its fifth week of lockdown, with no plan yet to relax any of the restrictions – in fact, some regional authorities have continued to tighten rules.

Conte told the nation to be patient in the face of a pandemic that has now officially claimed 16,523 lives and left millions at least temporarily unemployed.

“We will soon see a new spring for Italy but for the moment we must stay at home,” the Italian leader said.

The Italian government is now believed to be working on further measures worth at least the same amount, to be announced later this month, which will include emergency support for the estimated 3.3 million people stuck in Italy's underground economy.

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COVID-19

Covid-19: Are Italian live events at risk of being postponed?

As the infection rate rises sharply across the country, Italian virologists are calling for concerts and festivals to be rescheduled.

Covid-19: Are Italian live events at risk of being postponed?

Italy has seen a large increase in the number of Covid-19 cases in recent days, so much so that a number of virologists across the country are now urging the government to postpone major live events in a bid to curb infections. 

According to a new report by Italy’s independent health watchdog, the Gimbe Foundation, 595,349 new cases were recorded in the week from June 29th to July 5th; a worrying 55 percent increase on the previous week. 

In the same time span, the country also registered a 32.8 percent rise in the number of hospitalised patients, which went from 6,035 to 8,003.  

The latest Covid wave, which is being driven by the highly contagious Omicron 5 variant, is a “real cause for concern”, especially in terms of a “potential patient overload”, said Nino Cartabellotta, president of the Gimbe Foundation. 

As Italian cities prepare to host a packed calendar of concerts and festivals this summer, health experts are questioning whether such events should actually take place given the high risk of transmission associated with mass gatherings.

READ ALSO: What tourists in Italy need to know if they get Covid-19

“Rescheduling these types of events would be the best thing to do right now,” said Massimo Ciccozzi, Director of Epidemiology at Campus Bio-Medico University of Rome. 

The summer wave is expected to peak in mid-July but, Ciccozzi warns, the upcoming live events might “delay [the peak] until the end of July or even beyond” and extend the infection curve.

Antonello Maruotti, Professor of Statistics at LUMSA University of Rome, recently shared Ciccozzi’s concerns, saying that live events as big as Maneskin’s scheduled Rome concert are “definitely not a good idea”. 

The Italian rock band are slated to perform at the Circus Maximus on Saturday, July 9th but the expected turnout – over 70,000 fans are set to attend the event – has raised objections from an array of Italian doctors, with some warning that the concert might cause as many as 20,000 new cases.

If it were to materialise, the prospected scenario would significantly aggravate Lazio’s present medical predicament as there are currently over 186,000 Covid cases in the region (nearly 800 patients are receiving treatment in local hospitals). 

Italian rock band Maneskin performing in Turin

Italian rock band Maneskin are expected to perform at the Circus Maximus in Rome on Saturday, July 9th. Photo by Marco BERTORELLO / AFP

But, despite pleas to postpone the event, it is likely that Maneskin’s concert will take place as scheduled.

Alessandro Onorato, Rome’s Tourism Councillor, said that rescheduling is “out of question” and that “all recommendations from the local medical authorities will be adopted” with the help of the event’s organisers and staff on the ground.

At the time of writing, there is also no indication that the Italian government will consider postponing other major live events scheduled to take place in the coming weeks, though the situation is evolving rapidly and a U-turn on previous dispositions can’t be ruled out.

READ ALSO: At a glance: What are the Covid-19 rules in Italy now?

On this note, it is worth mentioning that Italy has now scrapped all of its former Covid measures except the requirement to wear FFP2 face masks on public transport (though not on planes) and in healthcare settings.

The use of face coverings is, however, still recommended in all crowded areas, including outdoors – exactly the point that leading Italian doctors are stressing in the hope that live events will not lead to large-scale infection.

Antonio Magi, President of Rome’s OMCEO (College of Doctors, Surgeons and Dentists), said: “Our advice is to wear FFP2 masks […] in high-risk situations.”

“I hope that young people will heed our recommendations and think about the health risks that their parents or grandparents might be exposed to after the event [they attend].”

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