Italy to begin lifting restrictions, allowing some businesses to reopen
Today, Italy will begin the phased easing of lockdown restrictions first imposed on March 9—the longest COVID-19 lockdown of any country in the world.
Construction, manufacturing and wholesale businesses are expected to open from today in the first step towards what Prime Minister Giuseppe Conte plans to be the full reopening of the beleaguered economy. All going well, retailers will open by May 11 and bars and restaurants by May 18.
Despite the risk of a second wave of infections, Rome has decided that the economic damage of continuing the lockdown is untenable. Europe’s fourth-largest economy contracted 4.7% in the first quarter of this year and the IMF predicts up to a 10% slump in growth by year’s end.
Italy will almost certainly be forced to make hard choices in the weeks and months ahead. The ruling coalition is split between increasing debt to fund domestic stimulus measures or applying to the EU’s recovery fund. A concern with taking EU money is the lack of EU consensus on whether the fund comprises grants or loans. EU loans will come with tough austerity conditions that will be politically unpalatable to voters. However, borrowing more money will exacerbate Italy’s high debt—currently at 135% of GDP—and weaken the economic recovery.
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