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Italy approves €5bn financial aid package for Covid-hit businesses

As restaurants, gyms, cinemas and other businesses have been partly or completely shut down by Italy's new coronavirus restrictions, the government said it put together a financial rescue package in a "crazy race against time".

Italy approves €5bn financial aid package for Covid-hit businesses
Restaurants in Italy are to get compensation after being forced to close at 6pm. Photo: AFP
The Italian government overnight on Tuesday approved a financial aid package for businesses and workers affected by the latest restrictions aimed at containing the spread of coronavirus.
 
“We have just passed the decree, which is worth a total of over five billion, that will be used to provide immediate resources for the benefit of the sectors penalized by the latest emergency restrictions,” said Prime Minister Giuseppe Conte at a press conference at Palazzo Chigi in the early hours of Wednesday morning.
 
He said the financial package was put together “in a crazy race against time.”
 
“I signed the decree at about one in the morning, only when we were sure that these resources were there.”
 
Restaurants, bars, cinemas, theatres, gyms, spas and other venues were closed or partially closed nationwide on Monday as Italy’s latest emergency decree came into force, with the closures set to have a knock-on effect on many other businesses and sectors.
 
 
Business owners demonstrate outside Milan city hall on October 27th, against measures taken by the government aimed at curbing the spread of Covid-19. Photo: Miguel Medina
 
Concerned business owners and employees have held demonstrations against the measures in recent days – though police chiefs say these protesters were not behind the vandalism and scenes of violence seen in some cities.
 
The amounts paid to businesses hit by the decree will be “significant”, said Italy’s Finance Minister Roberto Gualtieri, explaining that restaurants would get compensation of between 5,000 and 25,000 euros based on their usual turnover.
 
 
One billion euros is set aside for the culture and tourism sectors, with payments of 1,000 euros for self-employed entertainment workers and special tax allowances to be made for the tourism sector, reported Italian financial newspaper Il Sole 24 Ore.
 
Conte said the payments would be made “in mid-November” – first to those who had already applied to previous compensation schemes during lockdown in spring, and “immediately afterwards also to others.”
 
“We are making an incredible effort not to introduce new taxes. Already this is a great result. We want social peace,” Conte said.
 
The prime minister acknowledged criticism of the new measures, saying: “Our choices can be legitimately criticised, we are in a democracy. But I want to say that we have not made indiscriminate choices.”
 
“To prevent the curve from getting out of control, it is essential to reduce the main opportunities for socialising.”
 
“If we respect these measures, we have a good chance of facing December with some serenity, without a stressed health system,” he said.
 
 
The Italian public appeared to be split on Tuesday over whether the new measures were adequate, too strict, or not strict enough, according to the findings of a poll by SWG and TV news channel LA7.
 
Some 28 percent think the measures are adequate considering the current situation.
 
 
However 36 percent were in favour of even tougher rules, saying the latest restrictions are insufficient to contain the spread.
 
One in four Italians thought the rules were too strict.
 
The post-6pm closure of bars and restaurants was found to be especially unpopular: almost half (48%) said this rule was excessive, while 35% consider it adequate, and 17% insufficient.

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MONEY

EXPLAINED: Why people in Italy might have to carry more cash from now on

Italian retailers will no longer face fines for refusing card payments on amounts lower than €60, after the government put the brakes on a recent push towards electronic payments.

EXPLAINED: Why people in Italy might have to carry more cash from now on

Italy’s new budget bill is set to add yet another controversial chapter to the country’s long and troubled history of card payment laws.

Under Italy’s new budget law, retailers will no longer be fined for refusing card payments for smaller amounts – a controversial move that is expected to have a knock-on effect for shoppers.

READ ALSO: Key points: What Italy’s new budget law means for you 

Fines for retailers refusing card payments on amounts lower than €60 will now be suspended until at least June 2023, according to a clause included in the text of the 2023 budget law published to media on Wednesday.

As set out by the bill, the six-month suspension will allow the newly created Ministry of Enterprises and Made in Italy to “establish new exemption criteria” and “guarantee the proportionality of the given penalties”.

And, though it isn’t yet clear what new exemptions the government is currently considering nor what exactly is meant by “proportionality”, what’s certain is that residents who had started to make more purchases by card will now have to repopulate their pockets with some good old banknotes because businesses – from taxi drivers to cafes and bars – might not accept card payments for small amounts.

Fines for businesses caught refusing card payments had been introduced by Draghi’s administration back in June 2022, with retailers liable to pay “a €30 administrative fee plus four percent of the value of the transaction previously denied”, regardless of the amount owed by the customer. 

Euro banknotes in a wallet

Under Italy’s new budget law, retailers will no longer be forced to accept card payments for transactions under €60. Photo by Ina FASSBENDER / AFP

The measure angered retailers who lamented having to pay hefty bank commissions on every electronic transaction – some business owners even went as far as openly defying the law and organised themselves into a protest group (Comitato No Pos, roughly meaning ‘Anti-point-of-sale committee’). 

Given the government’s new legislation, it seems like their efforts might just have paid off. 

But, while many business owners will no doubt be happy with the suspension, others have already raised doubts about the potential ripple effects of the government’s move.

Aside from shoppers having to carry more cash than they’re currently used to, many political commentators are warning that the suspension might be a “gift to tax dodgers” in a country where, according to the latest available estimates, tax evasion costs state coffers nearly €90 billion a year.

The same was said about another of the government’s recent changes: raising the cash payment limit from 2,000 to 5,000 euros.

READ ALSO: What’s changing under Italy’s post-pandemic recovery plan? 

A previous government led by Giuseppe Conte had introduced several measures aimed at encouraging the use of electronic payments, most of which have since ended or been rolled back.

The introduction of fines for businesses refusing card payments was one of the financial objectives set out within Italy’s Recovery Plan (PNRR), which expressly refers to the fight against tax evasion as one of the country’s most urgent priorities. 

It is therefore likely that the new cabinet will at some point have to explain the latest U-turn on Recovery Plan policies in front of the EU Commission.

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