ROME: The Italian government is set to detail some €40 billion ($48.8 billion) of stimulus measures for the economy on Thursday, funding tax relief and grants to businesses forced to close by coronavirus lockdowns.
The extra spending was already factored in to the government's public finance targets in April, and is set to drive the budget deficit to 11.8 per cent of national output this year, from 9.5 per cent reported in 2020.
Rome's huge public debt, the second highest in the euro zone as a share of gross domestic product after that of Greece, is forecast by the Treasury to climb to 159.8 per cent of output this year, the highest level in Italy's post-war history.
Including the latest measures due to be approved by cabinet on Thursday, Italy has deployed more than €200 billion of extra spending since the Covid pandemic hit the country 15 months ago.
Mario Draghi's cabinet is scheduled to meet at 11:15 am to discuss and approve the package.
Of the €40 billion, up to 18 billion will finance grants to companies, government and political sources said.
Around €5 billion will be used to support employment, with measures including tax breaks for companies that hire and train permanent employees, a source from the Labour ministry said.
More than 2 billion euros will go to the health service, as Italy tries to accelerate its Covid-19 vaccine roll-out.
As of Wednesday, some 15 per cent of the Italy's population had been fully vaccinated, while around 33 per cent had received at least one shot, figures which put the country broadly in line with the European Union average.
Other measures in the spending package include a six-month extension of state guarantees on bank loans to the end of 2021, and a debt holiday scheme on loan repayments for small-and medium-sized companies.
Until the end of June, no repayments of any type will be due, while from July until the end of the year, only the interest must be paid.
Rome is still debating whether to include in the package beefed-up tax incentives for bank mergers, sources said. Tax breaks for the sale of banks' bad loans could also be prolonged. - Reuters
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