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.