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Italy to ramp up spending on coronavirus, further restrictions possible

A woman wearing a protective face mask carries a tray on the second day of an unprecedented lockdown across all of the country, imposed to slow the outbreak of coronavirus, in Rome, Italy March 11, 2020. REUTERS/Yara Nardi

ROME (Reuters) – Italy will ramp up spending to help the economy cope with the impact of the coronavirus, earmarking 25 billion euros ($28.3 billion) to tackle the growing crisis, Prime Minister Giuseppe Conte said on Wednesday.

Last week the cabinet said it would need just 7.5 billion euros, but since then the emergency has escalated dramatically and the entire nation is under lockdown, freezing much economic activity in a nation that was already flirting with recession.

Conte told reporters that already tough restrictions on movement might be tightened further after the northern region of Lombardy, centered on Italy’s financial capital Milan, asked for all shops to shut and public transport to close.

“We are ready to listen to requests from Lombardy and other regions,” Conte told a news conference, adding that caution would be needed before deciding to introduce fresh measures.

“The main objective is to protect citizens’ health, but we must take into account that there are other interests at stake. We must be aware that there are civil liberties that are being violated, we must always proceed carefully.”

Italy is the worst-affected country in the world after China, with some 631 deaths and 10,149 confirmed cases since the contagion came to light in Lombardy on Feb. 21.

The extra spending means Italy’s 2020 budget deficit looks certain to climb above 3% of national output, the ceiling set by the European Union’s rules.

Economy Minister Roberto Gualtieri, who last week forecast a deficit of 2.5%, declined on Wednesday to give a new target.

He said that Rome might need help from European Union funds to take some of the burden off Italy.

Reporting by Giuseppe Fonte and Giulia Segreti; Writing by Crispian Balmer, editing by Gavin Jones

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