Italy cabinet approves new package of measures to spur growth

Milan. Italy’s cabinet approved a series of measures to boost the economy, even as the Treasury prepares to slash growth forecasts for the year and raise its projected budget deficit.

The so-called Growth Decree contains incentives including measures to encourage a restart of private investment as well as actions to safeguard the “Made in Italy” brand.

The steps “will contribute to the country’s recovery, based on stronger growth, thanks to support for companies, labour and production,” Prime Minister Giuseppe Conte said in a statement.

While critics say the government’s actions on growth don’t go far enough, much of the debate on the package surrounded possible measures to reimburse depositors for savings lost in bank failures. The package announced late Thursday did not include text on banks.

The banking measure has been a bone of contention within the government as well, fuelling speculation that Finance Minister Giovanni Tria could resign. However, Italian media has reported that Tria has struck a deal with Deputy Prime Ministers Luigi Di Maio and Matteo Salvini to sign on to the banking plan.

In a separate statement, Salvini’s League said the government needs to pick up the pace of reform, indicated that the measures on banks will be ready by Monday, and called for action on unblocking public works and launching the party’s favoured “flat tax” plan.

The full decree also allows the Treasury to convert part of an Alitalia bridge loan into company shares and enter in shareholding of new company that will take over the assets of the indebted airline, Corriere della Sera reported Friday.