Italy to boost measures to help small firms, Japan unveils fresh economic package
Italy will boost measures to soften the economic impact of the COVID-19 such as suspending the need to pay household bills, calling for the European Union to change its rules to allow more government spending. The whole of Italy is under lockdown until next month in an unprecedented attempt to beat the epidemic.
Industry Minister Stefano Patuanelli said the government would approve measures worth around €10 billion (US$11.35 billion) to help companies and families, saying this would probably cause the budget deficit to rise to just under 3 per cent of national output this year.
Economy Minister Roberto Gualtieri wrote to the European Commission last week to say Rome planned to raise the current 2.2 per cent official target to 2.5 per cent. A government source told Reuters yesterday the Treasury was considering lifting it to 2.8 per cent. With the economy now widely expected to fall into deep recession, further upward revisions seem possible.
Patuanelli said that among a first batch of measures, the government planned to suspend payments of bills, taxes and mortgages in order to ease pressure on small firms and households. Other steps would come later, he added. The cabinet is due to meet tomorrow to approve the initial package. The minister called on the European Union to change its Stability Pact and Fiscal Compact public finance rules once the emergency linked to the coronavirus had settled, saying the economic toll would hit many people.
IN TOKYO, Japan’s Prime Minister Shinzo Abe announced a second emergency package to tackle economic woes stemming from the COVID-19 outbreak, including US$15 billion in loan programmes to support small businesses. The package came as the government ramps up its response to the virus, which has infected more than 500 people across the country and been linked to nine deaths. It included plans to expand the government’s low interest loan programmes to ¥1.6 trillion (US$15 billion) from its original ¥500 billion announced last month in the first package.
“We shall issue a powerful capital assistance worth ¥1.6 trillion that will include offering loans effectively with no interest so that small businesses across Japan that are going through very difficult time can continue their operations,” Abe told the government’s special outbreak taskforce. The latest assistance will be designed to ensure steady cashflow for small businesses feeling pressure from the virus’s global spread. The package will also include fiscal spending worth ¥430 billion for a variety of programmes, including boosting production of masks and helping nurseries and elderly care facilities to prevent outbreaks.
The spending programme will also cover financial help for working parents who had to miss work and stay home to care for their children after schools across the nation closed.
In mid-February the government set aside an initial ¥15.3 billion for the fight against the virus, including money to boost testing, strengthen inspections at borders and support manufacturers of face masks.