Policy Briefs

C. Bastasin, L. Bini Smaghi, M. Messori, S. Micossi, P. C. Padoan, F. Passacantando, G. Toniolo – ITALY’S RESPONSE TO THE HEALTH CRISIS: THINKING TODAY ABOUT THE COUNTRY’S FUTURE

An unprecedented crisis is unraveling before our eyes. The damage caused to people’s and business’ economic viability is being added to the losses and human suffering caused by the Covid-19 epidemic. Even the economic consequences, as well as those concerning healthcare, elude our ability to reliably predict developments in the coming months. The "consensus" forecast on the fall in Italy’s GDP, currently 5% in 2020, would require the economy to start recovering at the end of May and to remain firm afterwards. This is an optimistic hypothesis. Other estimates place the fall in Italy’s GDP well above 10%.

In this context, the task of the state is primarily to strengthen healthcare, ensure the functioning of essential activities and provide immediate and general insurance to incomes, jobs and the survival of businesses for as long as necessary. The state will have to mobilize resources that are three or four times greater than those currently estimated. In addition, it will have to carefully assess how to intervene in order to prepare for recovery after the fall. It is very important that all the measures are placed in a broader perspective than that of today and opportunity is found to support investments in production, which in the future will be the engine of the Italian economy’s recovery in line with the new models of sustainable and efficient development.

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