Italy may have to spend Us$12bil a month on lockdown aid

MILAN: Italy may need to spend as much as € 10bil (Us$11.8bil) a month to aid businesses and workers hit by coronavirus restrictions, according to sources.

Authorities are working on plans that would help the country navigate through a surge in infections that’s derailed the rebound from one of Europe’s worst recessions.

Lockdown measures similar to the ones imposed earlier this year are estimated to cost

€ € the government between 40bil and 50bil, or about 3% of Italy’s output, if they last until March, said the sources.

Under softer curbs, the aid bill would be at

€ least 6bil a month, they said.

A Treasury official said that, at this time, only the approved spending plans and forecasts are confirmed.

Italy had 35,098 new coronavirus cases on Tuesday and is set to surpass one million cases this week. Hospitals are under severe strain across the country, with more than half of hospital beds occupied by Covid-19 patients.

The eurozone’s third-largest economy has struggled to deal with the spread of the coronavirus, largely because the government lacks the fiscal space to spend its way through the crisis. Saddled with one of the world’s highest debt burdens, it has relied on exceptional support from the European Central Bank to tap bond markets.

That’s helping to keep borrowing costs in check. Italy’s 10-year yield was at 0.77% in Rome. That’s less than half the average seen in 2019.

To cushion the impact of a partial lockdown covering several regions, the govern

€ ment has already approved 8bil in additional support.