Italy’s debt will rise to the highest level in over a century this year, breaching the 159.5% record set in 1920, according to the government’s latest economic update.
Prime Minister Mario Draghi’s cabinet approved the new numbers on Thursday, forecasting economic growth at 4.1% in 2021 and targeting it at 4.5% once stimulus measures and other legislation are factored in, according to a government official.
The budget deficit is expected to widen to 11.8% this year as Europe’s third-biggest economy seeks billions of extra euros in borrowing to help protect its citizens and businesses from the fallout of the pandemic.
Italy has been battered by the coronavirus, which has killed more than 115,000 and led to lockdowns that have gutted key sectors like tourism. The government has agreed to borrow 40 billion euros ($48 billion) for new stimulus measures, which pushes its overall pandemic spending so far to over 170 billion euros.
In recent days restaurateurs and other business owners have clashed with police in Rome amid protests calling for easing of lockdown conditions and more economic support. Elsewhere, demonstrators have blocked highways as they campaign for a quicker reopening of the country.
The government has signaled that it might start easing some measures as early as later this month, prioritizing open-air activities.
Vaccination push
Draghi, the former head of the European Central Bank, has been ramping up pressure on regional governments to speed up their vaccination drives, particularly by focusing on elderly citizens. But his government is struggling to reach a target of 500,000 shots a day by the end of the month amid halts in the use of some vaccines and concerns about safety.
In line with other EU countries, Italy is holding back vaccine doses produced by Johnson & Johnson and has been facing cancellations by people scheduled to receive the AstraZeneca Plc shot amid reports of rare blood clot cases.
Health Minister Roberto Speranza told lawmakers that the AstraZeneca vaccine is efficient and safe, like all other vaccines currently being used in Europe. Commenting on the review of Johnson & Johnson’s vaccine, Speranza said, “our hope is that soon there can be elements of clarity which allow us to start to use a vaccine which will be important for our campaign.”
—With assistance from John Follain.