Italy approves new stimulus package to help virus-hit economy

Girls wearing face masks walk past a sculpture by Canadian Artist Timothy Schmalz outside Santo Spirito hospital in Rome, Sunday, Oct. 18, 2020. (AP)
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Updated 19 October 2020

Italy approves new stimulus package to help virus-hit economy

  • Among measures to support the health and education system, the government will set up a €4 billion ($4.7 billion) fund to compensate companies worst hit by coronavirus lockdowns

MILAN: Italy has approved a new stimulus package in its 2021 budget to foster an economic rebound from the recession caused by the coronavirus disease (COVID-19) pandemic, a government statement said on Sunday after a late-night Cabinet meeting.

The ruling coalition, led by the anti-establishment 5-Star Movement and center-left PD party, agreed on a preliminary version of the stimulus package, a government source said, leaving final details to be hammered out.

Among measures to support the health and education system, the government will set up a €4 billion ($4.7 billion) fund to compensate companies worst hit by coronavirus lockdowns.

The budget also extends temporary layoff schemes for companies with workers on furlough and offers tax breaks to support employment in the poor south of the country.

Italian Prime Minister Giuseppe Conte is expected on Sunday to also announce new measures to curb the steady spike in COVID-19 cases over recent weeks.

One of the European countries worst hit by the pandemic, Italy has forecast a 9 percent economic contraction for 2020 and a budget deficit equating to 10.8 percent of the country’s gross domestic product.

The expansionary package is expected to keep Italy’s deficit next year to 7 percent of economic output, up from a 5.7 percent forecast in April, reflecting the additional spending.

Italy has forecast economic growth of 6 percent in 2021.

Expansionary measures next year will total €40 billion, including cheap loans and grants from the European Union’s Recovery Fund, Gualtieri told lawmakers this month.

Production could start by 2022 at Russian industrial zone in Egypt

This picture taken on July 9, 2019 shows tankers and cargo ships navigating through the Great Bitter Lake in the Suez Canal southwards towards the Egyptian port city of Suez. (AFP)
Updated 19 October 2020

Production could start by 2022 at Russian industrial zone in Egypt

  • Russia’s ambassador to Egypt, Georgy Borisenko, said 32 Russian companies are interested in the zone
  • The project requires that 90 percent of the jobs created by the zone be filled by Egyptian workers

CAIRO: Production could begin at a Russian industrial zone in the Suez Canal Axis development as soon as 2022, if final negotiations to establish the zone are completed in the coming year, according to Georgy Borisenko, Russia’s ambassador to Egypt.

He told Egyptian newspaper Al-Akhbar that the project is underway and, although there are still some details for Egyptian and Russian authorities to iron out, 32 businesses based in Russia are interested in establishing factories and storage facilities there. They operate in fields such as food, plastics and electrical appliances. Egypt will benefit from the creation of jobs for local workers, he said, and the transfer of Russian technology in a number of fields.

“These are private-sector companies that need commercial advantages and that is the reason for continuing discussions with our Egyptian counterparts to achieve the best position for Russian companies,” said Borisenko.

“Egypt requires that 90 percent of the workers in Russian projects be Egyptians, and the manufacture and export of more products with the (Made in Egypt) label to many countries that share free-trade zones with Egypt. Russian companies will reap profits from their projects.

“Currently, negotiations are underway to conclude several agreements, which we hope will end next year. If they go as smoothly as we hope … work will start in the Russian industrial zone and the first production will (take place) in 2022 — not from all the factories because some need more time.”

The ambassador said that Russia has a keen interest in enhancing trade relations with Egypt, which it considers the main gateway to Africa.

“Egypt accounts for a third of the volume of Russian trade with Africa and we are interested in strengthening our economic relations through several projects, such as the Russian industrial zone and several major contracts, such as supplying 1,300 railway cars through the Russian company Transmash, in partnership with Hungary,” he added.

Borisenko also noted that construction work is continuing at El-Dabaa on Egypt’s first nuclear power plant.

“It must be noted that nuclear plants need a long time to be built,” he said. “It is natural that building a nuclear plant takes at least 10 years and, unfortunately, the outbreak of the coronavirus negatively impacted the plant’s construction schedule.”

He also indicated that it was possible that a Russian COVID-19 vaccine, when developed, could be manufactured in Egypt. The Egyptian Pharmaceutical Company has requested the vaccine, and it would be made available as soon as approval is granted by the Egyptian Ministry of Health, he added.

“We will be happy to supply more quantities of vaccine and help Egypt protect its citizens because the required quantity is not sufficient for the Egyptian people, who currently exceed 101 million,” said Borisenko.

“In the event that Egypt wants more, the matter is not only related to the supply. The Russian Direct Investment Fund may give a license to manufacture the vaccine in Egypt, which will be a great benefit to Egyptian companies, providing job opportunities and giving Egypt the opportunity to be a center for exporting the vaccine to African countries.”