SMM: according to a report, an Italian government official said that the country is ready to launch a 20 billion euros ($22.73 billion) economic stimulus package, which includes family tax breaks and more funds to help the auto industry, local governments and workers who have been temporarily laid off. The rest of the spending, which includes additional borrowing, is expected to increase Italy's budget deficit to about 11.6% of GDP from 10.4% in April.
In 2019, Italy's deficit as a share of GDP fell to a 12-year low of 1.6%. At the beginning of 2020, Italy's goal was to grow to 2.2 per cent. But the new crown virus plunged Europe's third-largest economy into a deeper recession, and previous targets became meaningless.
"nearly 1 billion euros will be used to boost economic stimulus and encourage sales of state-of-the-art internal combustion engine vehicles, electric vehicles and hybrid vehicles," the government official said. " The Italian government will allocate an additional 10 billion euros to the temporary unemployment relief program to help workers on leave tide over the epidemic, rather than firing them.
The government will selectively extend some of the existing plans by 18 weeks. Companies that were severely damaged by the outbreak blockade in the first half of 2020 are eligible to apply for more aid. Rome will also extend its ban on layoffs, which expires in mid-August. The person said there was also a need to support local governments, whose tax revenues had been severely reduced by the blockade.
He added that the stimulus package has not yet been finalized and is likely to change, but is expected to be passed by the cabinet in early August. One of the premises is that the government must first have the support of parliament in order to raise the deficit target.
The new stimulus comes after the Italian government has so far pledged 75 billion euros in aid to households and businesses. So far, Italy has pledged as much as 180 billion euros, including government guarantees for potential bank loans, but actual spending is likely to be much lower because the government expects most guarantees not to be activated.
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