By Silvia Marchetti
ROME (MaceNews) – Italy’s government prepares to clear soon some EUR 20-30 billion in extra deficit spending to tackle the protracted pandemic with additional measures to support the recovery, according to ruling coalition sources.
An official argued that the figure could be even higher if the economic outlook further worsens and there are “significant” delays in the vaccination campaign. On Monday Italy went back to a nation-wide shutdown set to run until early April with shops and schools closed again. On Monday evening the AstraZeneca vaccination campaign was put in freeze-mode following cases of alleged deaths of patients after they had gotten their first shot.
“It’s important that our next budget move earmarks a significant deficit spending target to tackle the emergency, with extra measures to support ailing firms, families and low earners. It’s appropriate that the figure is high so to avoid parcelling aid into other deficit financing decrees in a short timeframe were the emergency not to abate”, said one official.
Once the government clears the extra deficit spending decree parliament must then vote to green light the budget boost. Another source argued that timing is crucial and the decree with additional spending is likely to be approved within the next few weeks in order to be “efficient”.
Sources noted that the suspension of the AstraZeneca vaccine, one of three vaccines currently used in Italy, even if momentary risks further delaying the completion of the vaccination campaign with a shortfall of roughly 3 million doses in coming days.
Rome was hoping to reach an overall 80% population immunity by end of September but the calendar and planning targets are now likely to be revised and shifted to December as other European countries as well have stopped the AstraZeneca vaccine use triggering a EU-wide shortfall.
Since the outbreak of the pandemic one year ago Italy has cleared several decrees approving extra deficit spending worth in total over EUR100 billion. This upcoming budget move will be the first of premier Mario Draghi’s new cabinet.
Sources argued that relying on additional deficit spending is the only way at present to fight the pandemic’s impact in the absence of direct European aid through the Next Generation EU recovery fund which has yet to become operative.
The latest rise in deficit spending, roughly EUR 37 billion, was decided at the end of January by the previous government of premier Giuseppe Conte but “has proven to be insufficient in the short term to fund needed pro-growth measures”, say sources.