Vol 17 (2020) - Issue 4

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Measures Taken By the Italian Government to Support the Economy in the COVID-19 Pandemic

Synopsis
Italy was in lockdown from 10 March to 4 May. It wasn't until June 18 that all restrictions were lifted and life largely went back to normal. In that three-month period only a few business sectors were allowed to remain active. Most business activities have been hit significantly by the lockdown. Retail business, in particular, is down 90 percent. Unsurprisingly, as a result of this Italian GDP is expected to be down by almost 13 percent for 2020.

The Italian government responded to economic crises ignited by the COVID-19 pandemic with three law decrees (that is, laws enacted by the government out of 'urgency and necessity' that must be converted into laws by Parliament within 60 days): Law Decree No. 18 of 17 March 2020 ('Decreto Cura Italia'), Law Decree No. 20 of 8 April 2020 ('Decreto Liquidità'), and Law Decree No. 34 of 19 May 2020 ('Decreto Rilancio').

Essentially, the bulk of the measures implemented by the government through these emergency laws are aimed at making it easier for businesses hit by the effects of the pandemic to obtain new liquidity. Although it may be too early to assess the impact of the measures taken by the government to support businesses hit by the lockdown, recourse to massive bank indebtedness prompted by the emergency laws is likely to create problems in the mid-term.