Italy coronavirus: Pandemic-hit nation will need TWO years for GDP to recover from crisis

The Association of Italian cooperatives, Census and Confcooperative, has said that the lockdown will result in a loss to the country, which is the eurozone’s third-largest economy, of more than €270 billion (£240 billion).

Italy has so far been the worst affected country in Europe by COVID-19 and has witnessed more than 17,000 deaths.

The European country already had a vulnerable economic situation with a high debt to GDP ratio and high unemployment.

The country fears that many jobs in retail, tourism and hospitality will not exist after the lockdown.

This comes as Italy’s government approved a new emergency package offering more than €400 billion (£353 billion) worth of liquidity and bank loads to companies hit by the crisis.

Last month Italy announced 340 billion euros (£300 billion) in government approved loans.

The report says that the lockdown has stopped 48.2 per cent of all businesses to run in the country.

President of Confcooperative, Maurizio Gardini, said: “Despite everything, the glass should be seen half full because the right containment measures for the coronavirus have not blocked the entire economy.

“In conditions of extraordinary urgency, the system requires extraordinary, courageous and above all fast measures that make it possible not to turn off the engines, otherwise we risk, when the emergency passes, to leave a million businesses hanging.

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“The engines of the entrepreneurial system must be kept on to allow the restart as soon as possible and to seek the necessary rebound for our GDP.

“Otherwise we risk leaving behind this lockdown with 20 percent of the companies inactive, slightly less of one million SMEs, with indescribable consequences in terms of turnover and employment in the country.”

The new legislation implemented by the government allows banks to offer billions of euros of credit in a bid to help the economy.

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Regarding the money being pumped into the economy, Prime Minister Giuseppe Conte has said: “This is real firepower. I cannot remember such powerful measures being introduced in the history of our republic to help with the financing of our businesses”.

The cash will guarantee loans to businesses in the country, which will cover the majority of the debt for smaller businesses and 70 percent for bigger businesses.

Italy has been in lockdown for almost a month and measures are set set to remain in place until April 13th.

Additional reporting by Maria Ortega

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