By Giuseppe Fonte and Crispian Balmer
ROME (Reuters) – Italy will ramp up spending to help the economy cope with the impact of the coronavirus and might impose further restrictions on movement to slow the spread of the disease, Prime Minister Giuseppe Conte said on Wednesday.
Italy is the worst-affected country in the world after China, with some 631 deaths and 10,149 confirmed cases since the contagion came to light in the wealthy northern region of Lombardy on Feb. 21.
After an initial lockdown in the north failed to halt the spread, the government on Monday banned all non-essential travel and public gatherings throughout Italy until April 3, halted all sports events and extended a shutdown on schools.
Acknowledging the escalating crisis, Conte told reporters the government would put aside 25 billion euros ($28.3 billion) to help mitigate the impact on the economy. Only a week ago, he estimated it would need just 7.5 billion euros.
“It won’t all be used immediately, but certainly it will be there to use to cope with all the difficulties of this emergency,” Conte told reporters after cabinet signed off on the higher sum.
The extra spending means Italy’s 2020 budget deficit looks certain to climb above 3% of national output, a ceiling set by European Union rules.
Economy Minister Roberto Gualtieri, who last week forecast a deficit of 2.5%, declined on Wednesday to give a new target and warned that Italy’s economy could see a “significant contraction” in full-year 2020 GDP growth.
European Union chiefs have said the bloc will relax its budget rules to allow countries to tackle what is an increasingly continent-wide crisis.
Conte said the government might impose further restrictions on the movement of people after Lombardy, which is centered on Italy’s financial capital Milan, asked for all shops to shut and public transport to close.
“We are ready to listen to requests from Lombardy and other regions,” he said, adding that caution would be needed before deciding to introduce fresh measures.
“The main objective is to protect citizens’ health, but we must take into account that there are other interests at stake. We must be aware that there are civil liberties that are being violated, we must always proceed carefully.”
Most Italians appear to be respecting the most severe controls placed on a Western nation since World War Two, with traffic much quieter than usual in major cities, many shops and restaurants closed and only a few flights operating.
Slovenia became the latest country to curb travel from Italy, saying it would close some border crossings and perform health checks at those remaining open.
An opinion poll by the Ixe agency showed 89% of Italians backed their authorities’ draconian measures, with 78% saying they would support even tougher steps, even though 76% thought the existing ones would have a “grave” impact on the economy.
Highlighting the human cost of the outbreak, the government said the head of the medical association in the northern city of Varese, 67-year-old Roberto Stella, had died of the virus.
Looking to prevent a flare up in the southern city of Messina in Sicily, the mayor said he would introduce a curfew and allow only food stores to remain open. Cateno De Luca said there were only 10 intensive care beds in the area and they could not cope with any mass infections.
Gualtieri said that Italy, which has the second highest debt pile in Europe after Greece, might need help from EU funds to take some of the burden off its public finances.
He reiterated a pledge that nobody should lose their job as a result of the crisis and said the government was looking at measures to free up bank capital to help support companies and families.
(Reporting by Giuseppe Fonte, Giulia Segreti, Angelo Amante and Francesca Piscioneri; Writing by Crispian Balmer, editing by Gavin Jones and Philippa Fletcher)