The pandemic has killed more than 30,000 people in Italy. (Archive photo)
Milan:
Faced with its deepest recession since the Second World War and the collapse of business confidence, the coronavirus pandemic hit the Italian economy hard.
Business confidence in the third largest euro area economy in May fell to its lowest level since the official statistical institute ISTAT started the index in March 2005.
The figure is “alarming,” said the Confederation of Small Businesses Confesercenti.
“The health and economic emergency has swept through businesses, particularly in shops, services and tourism,” he said.
Its members are particularly concerned “about the lack of liquidity necessary to pay charges and salaries … we are close to a point of no return and that is why the measures decided by the government (loan guarantees, grants to PME) must be operational immediately, “said the boss of the federation, Patrizia De Luise.
“We have to cut red tape and speed up and simplify procedures, because if support is delayed again, many businesses will have no choice but to stop,” she said.
Last week, the government accused banks of failing to act quickly enough, but said it had already passed around 400,000 loan requests worth more than 18 billion euros ($ 20 billion) to Central government-guaranteed fund.
One million jobs threatened
Italy was the first European country to be hit by the pandemic and imposed a strict two-month lockdown that paralyzed much of the country’s economic activity.
As a result, the country should experience a drop in its GDP of between 9 and 13%, announced Friday the Bank of Italy.
The data also showed that the economy contracted 5.3% in the first quarter – worse than the 4.7% initially estimated.
It had not experienced such an “exceptional” decline in the first quarter since 1995, said ISTAT.
This year’s losses could amount to 170 billion euros, equivalent to the GDP of Veneto, the third largest industrial region in Italy, according to a study by Mediobanca.
The head of the country’s main business confederation, Cofindustria, Carlo Bonomi, said that up to a million jobs could be threatened nationwide.
“We are expecting figures in late May, but there are indications that between 700,000 and one million jobs are at risk,” he said.
“Jobs are only created if there is growth, innovation, investment. The car manufacturing crisis cannot be solved with subsidies or holidays. You solve it by looking towards future by investing in new technologies, “he said.
Italy should be the main beneficiary of a 750 billion euro recovery plan from the European Union, but this may not be enough yet.
No help
Italian citizens are slightly more optimistic, but far from happy. The pandemic has killed more than 30,000 people.
Consumer confidence fell from 100.1 points in May to 94.3 in March, its lowest level since December 2013.
While the state has paid leave or scholarships for those who are no longer able to work, many have slipped into the net.
Among them, Eleonora Fogliacco, 35, a fitness and swimming teacher in Lombardy, the most affected region where the gymnasiums were closed at the end of February.
“I did not qualify for the monthly payment of 600 euros to the government because I won more than 10,000 euros last year,” she told AFP.
“During the crisis, I had peaceful days and days when I felt completely lost, without any help from the State. I could no longer see the future and I did not know what to keep”, a- she declared.
“I’m not buying anything. I’m counting on my partner for shopping,” said Fogliacco.
“This situation has changed everyone’s lifestyle (and) everything will be very complicated” in the future, she added.
According to a Confcommercio-Censis poll published on Tuesday, 53% of Italian families see their future negatively and 68% see the future of the country negatively.
As a result of the foreclosure, 42 percent of families had to reduce work and income, 26 percent stopped working, and 24 percent were put on leave.
Six in 10 families fear losing a job, which is why 28% have decided not to take vacations or long weekends.
