Italy shuts most factories to halt coronavirus
The Italian government has decided to expand the mandatory closure of non-essential commercial activities to heavy industry.
Italy has become the first developed nation in the West to wind down most of its industry to halt the spread of coronavirus.
After more than two weeks of a nationwide lockdown, the Italian government has decided to expand the mandatory closure of non-essential commercial activities to heavy industry.
The move by Italy, which is leading the globe in virus deaths, is more in line with draconian measures taken by China than with declarations coming out of other democratic partners, who are at least a week or two behind Italy’s rate of virus infections.
The industrial lobby Confindustria estimates a cost of 70 billion to 100 billion euro (£64 billion-£91 billion) of national wealth a month if 70% of companies are closed, as anticipated. Though some big companies had already suspended activities, thousands of smaller manufacturers had continued after adopting new safety regulations, and will now shut down.
“We are entering a war economy,” said Confindustria president Vincenzo Boccia.
UniCredit bank’s chief economist, Erik Nielson, expects the economy to shrink by a staggering 5% to 15% this year – and that assumes a recovery towards the end of 2020 and takes into account a 25 billion euro aid package and 350 billion euro in credit lines. The Italian Treasury has put the virus hit at 5% to 7% of GDP in 2020.
The government decree mandates the industrial shutdown for one week, but as with the rest of the harsh containment measures they are likely to be extended depending on the pace of contagion.
Unions in Italy have fought to have more sectors considered non-essential in order to protect workers. They won limits on activity at call centres as well as the production of wood and plastic packaging, paper and chemical products.
The powerful CGIL union confederation had said the Government’s initial list counted 800,000 companies as essential, with workers numbering 7.5 million, or 57% of the workplace.
Italy’s moribund car industry has already been wound down voluntarily, with Fiat Chrysler shutting down most of its Italian production and Ferrari converting a part of its factory to help make respirators.
The tourism industry has been at a standstill for a month, and struggling Alitalia is virtually shut down. All non-essential commercial and retail activity was closed more than two weeks ago.
Premier Giuseppe Conte announced the new industry closures this weekend, citing the biggest emergency the country has faced since the Second World War. Industrial activities allowed to continue include any activity related to healthcare, agriculture and food production.
Under the measures, fashion house Prada said it will start producing 80,000 medical overalls and 110,000 masks for healthcare workers. Work on a Genoa bridge to replace the one that collapsed in August 2018 – considered of strategic importance – continued, while that on the Italian side of the Brenner Base Tunnel, which will be the longest rail tunnel in the world when completed, was suspended along with work on the Italian side of a high-speed rail tunnel to France.
In all, hundreds of thousands of small, medium-sized and large companies will be closed, with workers receiving partial salaries under short-term unemployment schemes that have been extended to even the smallest businesses.
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