ROME - The Italian government will approve a new spending package on Wednesday, Economy Minister Roberto Gualtieri said, the third major cash injection since the start of the new coronavirus outbreak in the country, to try to prop up the economy.
The stimulus will be worth at least 20 billion euros (18.2 billion pounds), political sources told Reuters, driving the 2020 budget deficit well above 11% of national output, compared with a 10.4% goal set in April.
The cabinet will approve the deficit increase at a meeting slated to start at 9 pm (1900 GMT).
Speaking in Parliament, Gualtieri declined to give details but said part of the extra spending would be used to allow people to pay taxes in instalments rather than in a single payment that is currently due in September.
The government has said it will present the measures in an emergency decree early in August, following a parliamentary vote on July 29 to authorise the deficit hike.
It will help tide Italy over while it awaits more than 200 billion euros in grants and cheap loans from the European Union’s Recovery Fund, which EU leaders approved this week.
The package will conditionally extend financing for temporary layoff schemes for an additional 18 weeks, one of the sources said. Companies hit hardest in the first half of 2020 will be entitled to extend the scheme provided they do not reduce their workforce.
The decree will also include new tax breaks to encourage companies to bring furloughed employees back to work, Deputy Economy Minister Antonio Misiani said in a television interview on Wednesday.
The new stimulus measures come on top of the 75 billion euros Rome has already deployed to help businesses and families.
Overall, the government has set aside some 180 billion euros, including a state guarantee for bank loans, though only part of this is expected to be spent.