Italy announces 400-bln-euro financial package to help coronavirus-hit businesses

Source: Xinhua| 2020-04-07 22:30:35|Editor: huaxia

ROME, April 7 (Xinhua) -- Italy's Prime Minister Giuseppe Conte late on Monday unveiled a new package of measures worth 400 billion euros (434.6 billion U.S. dollars) to support firms in COVID-19 emergency. He also announced the expansion of the so-called "golden power" rule, which enables the state to shield strategic assets from unwanted foreign takeovers.

In a televised address to the nation, the prime minister described the new stimulus package as "firepower" and the "most powerful intervention in the country's history."

Italian companies will be ensured immediate liquidity worth 400 billion euros overall -- some 200 billion euros for the domestic market and another 200 billion euros for the export market -- according to the decree.

Conte said that the central government would guarantee the quick delivery of these loans.

"We will strengthen the central guarantee fund for small and medium-sized enterprises (SMEs), and add state financing through SACE (Italy's Export Credit Agency), which remains within the perimeter of Cassa Depositi e Prestiti (state lender) for small, medium and large companies," Conte said.

This latest injection of financial resources adds to a first package of measures that granted government-backed loans worth 340 billion euros in March.

With regard to loans for export-oriented Italian companies, the decree states that "the (state) guarantee will cover between 70 percent and 90 percent of the financed amount, according to the company's size."

"Companies with less than 5,000 employees in Italy, and a turnover lower than 1.5 billion euros, will get a coverage of 90 percent ... and for them a simplified procedure to access the guarantee will be provided," it specified.

The state coverage would then decrease to 80 percent for companies with over 5,000 employees and a turnover between 1.5 billion euros and 5 billion euros, and to 70 percent for those with a turnover exceeding 5 billion euros.

The cabinet also agreed on "strengthening the special powers ("golden power") in areas of strategic importance and the financial transparency obligations."

This step aims at protecting Italian firms that might become more vulnerable because of the economic crisis linked to the COVID-19 emergency, so that they would not be easily taken over by foreign companies.

This would apply to "any company that carries out an activity of even minimal strategic interest," according to the prime minister.

"We will be able to control corporate operations and possible hostile takeovers not only in traditional sectors -- such as key infrastructures or defence -- but also in the sectors of insurance, credit, finance, energy, water, health and food safety, artificial intelligence, robotics, semiconductors and cyber security," Conte explained.

The decree also includes relief measures, such as pension deductions, social security contributions and compulsory insurance premiums on employees for the months of April and May.

Evictions from houses and non-residential buildings would be suspended up to June 30, and all judicial hearings would be further suspended nationwide up to May 11.

According to figures updated on Monday evening, the COVID-19 pandemic had claimed 16,523 lives in Italy. The country has reported a total of 93,187 active infections and a cumulative 132,547 coronavirus cases (including 22,837 recoveries). (1 euro = 1.09 U.S. dollar)