Italy discusses national debt with European Commission amid coronavirus epidemic

Source: Xinhua| 2020-02-27 15:22:51|Editor: xuxin
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ROME, Feb. 26 (Xinhua) -- Italian officials Wednesday discussed with the European Commission on whether Italy's efforts to fight the novel coronavirus should count against its national debt, with its economy already teetering on the brink of a recession.

Vice President of the European Commission for the Euro and Social Dialogue Valdis Dombrovskis said that the commission will be "flexible" toward the fiscal account of Italy and other countries hit hard by the coronavirus outbreak. The commission has also promised to provide some financial aid to help offset some costs of battling the virus.

Italian officials said the commission should allow the government to focus on controlling the spread of the virus without worrying about how it could affect the country's accounts.

"There are resources that the EU can give us in relation to economic events that could lower GDP (gross domestic product) considerably," Deputy Minister of Economy Laura Castelli told Italy's state broadcaster. "This is one of those situations where the European Union should help a member state in need of help. The talks about this are active and I hope they will end well."

According to the Italian National Institute of Statistics, in the final quarter of 2019, the economy shrunk 0.3 percent, its biggest contraction in six years.

Economists said that costs spent on paying the national debt -- which was worth an estimated 138 percent of the country's GDP at the end of 2019, one of the highest rates in the world -- were one of the main factors acting as a drag on economic growth. Impacts from the coronavirus, including factory closures and fewer tourist arrivals, are expected to further slow growth.

A total of 400 people have tested positive for the novel coronavirus in Italy till Wednesday evening. The government has placed 11 towns, 10 in Lombardy and one in Veneto, under lockdown in an effort to contain the epidemic.