Italy starts paying US$654 coronavirus benefit

At least 1.8 million self-employed people in Italy received their first monthly state benefit on Wednesday as part of a larger government package to financially support workers during the coronavirus emergency, the Labor Ministry said.

Each affected person receives a tax-exempt voucher of 600 euros (654 U.S. dollars). The 1.8 million self-employed people represent about 50 percent of all those who have applied and qualified for the benefit.

The other 50 percent will receive the benefit “by the end of this week,” Minister of Labor and Social Policies Nunzia Catalfo said in a statement on Tuesday.

Some 22 percent of these first 1.8 million recipients work in the agricultural sector, according to the statement.

The benefit is also planned to be granted for the month of May, and its increase to 800 euros is “plausible,” Italian Economy Minister Roberto Gualtieri told local media Tuesday evening.

Also on Wednesday, before the parliamentary finance committee, the Bank of Italy unveiled an official report analysing the economic impact of the coronavirus pandemic and the economy’s liquidity needs.

“Based on our assessment, Italy’s industrial production would have contracted by around 15 percent in March,” the report stated.

The paper said that confidence among firms and purchasing managers “sharply fell in the manufacturing sector, and also dropped to an all-time low in services and construction.”

“A similar decline is registered in household confidence indicators, and in particular on personal economic prospects, on the country’s economic prospects, and on employment effects (expected),” it specified.

Regarding businesses, the Bank of Italy’s report warned the sharp drop in sales due to the nationwide lockdown (in place from March 10 up to May 3 so far) was causing “a fast deterioration in the companies’ liquidity conditions.”

This problem is partly due also to the “inelasticity of some items of expenditure” in the Italian economy.

“Our estimates show that — between March and July — the additional needs for corporate liquidity might reach 50 billion euros,” the report said.

These estimates factored in the positive effects of some of the measures contained in the 25-billion-euro “Cure Italy Decree,” adopted in mid-March, and assumed the complete use of all new credit lines made available to firms during the coronavirus emergency.

The decree comprises a series of measures, some of which aim to stimulate “a very strong injection of liquidity into the credit system that can mobilize around 340 billion in loans to the real economy,” according to Gualtieri.

On April 7, the cabinet adopted a new package to support firms, ensuring further immediate liquidity worth 400 billion euros overall — some 200 billion euros for the domestic market and another 200 billion euros for the export market. (1 euro = 1.09 U.S. dollars) Enditem