MNI SOURCES: Italy May Spend 20% GDP In Virus Response

By Silvia Marchetti

     ROME(MNI) - Italy could eventually allocate as much as 20% of GDP to offset

the economic impact of the virus emergency, but it would not be earmarked in a

single shot, ruling coalition sources told MNI.

     After the Spanish government announced measures worth 20% of its GDP and

Germany has allocated roughly EUR500 billion to support its economy, sources

from the 5-Star Movement said Rome might also end up spending between 10% and

20% of its GDP.

     "The numbers (GDP-wise) circulating at EU level and at the recent Eurogroup

are far too optimistic, especially if the situation worsens, and the peak [of

virus impact] is yet to come. Italy's fiscal response will certainly be

proportional to the fall in the GDP, although that's still hard to evaluate at

the moment", said a 5-Star source.

     --EUR300 BILLION

     Sources within the opposition League party, whose support in parliament

would be necessary to approve fiscal packages, said the additional stimulus

could amount to roughly EUR300 billion.

     Rome has so far allocated roughly EUR25 billion to tackle the emergency.

     Sources close to the Democratic Party, which shares the coalition with

5-Star, preferred not to give any amount for total stimulus, adding that the

impact on GDP had still to be fully weighed and the government had opted for a

different approach than the Spanish one, by deciding on spending as and when it

was needed. But they confirmed confirmed that another stimulus package was

coming in April.

     "We allocate what we need as we proceed, regularly, if needed, and

commensurate to the current situation, rather than all in one shot like Spain."

     "For sure, the impact on GDP will be significant and our response will be

more than adequate", added the Democratic sources.

--MNI London Bureau; +44 203 865 3829; email: jason.webb@marketnews.com

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