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Telos' Blog

Apr, 2020

COVID-19: Focus on Italy. The Third Overview

An overview of the situation in Italy, with regards to the Covid-19 contagion spread and the Government’s response. You will find:

  1. A timeline of the major events that marked the contagion spread and the measures taken by the Government
  2. An overview of the latest measures to provide liquidity support to businesses during the lockdown
  3. Government’s golden power strengthened to prevent the takeover of domestic businesses by foreign operators, including EU ones
  4. State of play of the lockdown of manufacturing sites and estimated impact on the economy
  5. The latest available data on the contagion spread (as of 09 April)


22 January 2020

Ministry of Health Guidelines to healthcare units: patients to be tested for coronavirus include those showing symptoms of severe acute respiratory infection who have also visited China in the 14 days before the symptoms or have been in contact with someone who has.

31 January

All direct incoming flights from China, Hong Kong, Macau and Taiwan suspended. Still no measure in place to test and place in quarantine those arriving from other countries after visiting China.

8 February (until 22 February)

The Ministry of Health runs an ad on national TV channels where a well-known actor says that “the contagion spread is not at all easy”.

18-20 February

“Patient 1” visited in a hospital in Codogno, south of Milan (Lombardy Region). According to the Guidelines of the Ministry of Health, he is not tested because he had not visited China, and he is sent home on 18 February. Symptoms get worse and he shows up again the next day: this time he is tested and diagnosed with coronavirus, after infecting his relatives, several patients in that hospital as well as health professionals. This marks the beginning of the (recorded) circulation of the virus in Italy.

22 February

The Ministry of Health revises its guidelines to healthcare units: those who show symptoms of a severe acute respiratory infection should also be tested.

24 February

Government establishes two “Red Zones” which are completely locked down:

  1. 10 towns in Lombardy (including Codogno)
  2. 1 town in Veneto

Business activities are suspended in that area.

1 March

The rules applying to the “Red Zones” are extended until 8 March.

A “Yellow Zone” is established, including 3 Northern Regions (Lombardy, Veneto, Emilia-Romagna) plus 2 other Provinces in other neighbouring Regions.

Restrictions to social interaction were in place throughout the “Yellow Zone” (including the suspension of sports events, organized public gatherings, school and university attendance, limitations on the opening hours of museums, restaurants, bars, shops, malls etc.) but there was no generalised suspension of business activities.

2 March

The Government adopts legislation providing for an extension of deadlines for tax/bill payments for households and businesses in the “Red Zone”.

4 March

A number of restrictions are imposed on the whole country. School and University attendance is suspended until 15 March.

8 March

The lockdown regime is lifted on the 11 towns of the former “Red Zone”. Lombardy + other 14 Northern Provinces now form an “Orange Zone”, where severe limitations to social interaction, freedom of movement and some business activities apply, but no lockdown is in place: manufacturing sites continue to be operational and transport of goods is not affected.

9 March

The “Orange Zone” regime is extended to the whole country, until 3 April.

11 March

The “Orange Zone” regime is tightened: with a few exemptions, retail merchants are shut down until 25 March. Manufacturing sites are still not impacted.

11 March

Upon the Government’s request, Parliament authorised an increase in the 2020 deficit ceiling by €25bn.

14 March

Amid blue collars’ protests, the Government signs a protocol with Unions and business associations to safeguard workers’ health in manufacturing sites, in an attempt at avoiding a shutdown of factories.

17 March

The Government passes, with the Decree-Law 17 March 2020, n. 18, a €25bn package of measures to provide economic relieve to households and businesses.

22 March

The “Orange Zone” is further tightened through a Prime Minister Decree: the lockdown now applies to manufacturing sites as well, although with several exemptions. All previous measures are extended until 3 April.

24 March

Restrictions on the movement of people are also extended until 3 April, including an obligation for anyone entering Italy to undergo a 15-day quarantine (unless they are entering the country for proven work reasons, in which case they can stay in Italy for no longer than 5 days).

25 March

  1. The list of manufacturing sectors that are exempted from the lockdown is slightly amended through Decree 25 March 2020 signed by the Minister of Economic Development, Patuanelli.
  2. The Government sets out a new legal framework (Decree-Law 25/2020 n.19) for any future restriction until 31 July. Regions may adopt additional restrictions but are not allowed to take measures that impact on production facilities.

28 March

Amid concerns about the spread of poverty throughout the country, the Government distributes €400 million to local Administrations (Municipalities) so that they can provide low-income citizens with food stamps.

1 April

The “Orange Zone” regime is extended until 13 April.

6 April

The Government passes a new package of measures to provide liquidity support: up to €200 billion are allocated to assist bank loans to businesses with the State’s guarantee.


The latest package adopted by the Government on 6 April allocated up to €200 billion to assist new bank loans to businesses (of any size) with the State’s guarantee, which will cover between 70% and 90% of the loan. The guarantee will be conditional upon the commitment of the borrowing companies not to distribute dividends in the following 12 months and to locate its production in Italy.

Further support in the form of State’s guarantees on bank loans will be granted to small and medium enterprise through the involvement of a dedicated fund.

Export credits that are usually granted by SACE will be covered by the State’s guarantee by 90%, with a view to enabling SACE to grant further credit to exporting businesses in the range of €200 billion.

Finally, the deadlines for tax payments (already postponed until 30 April by an earlier economic recovery package) are now suspended until 30 May for businesses in a wide range of sectors harmed by the lockdown, particularly for small and medium enterprises.

Please note that the impact of this package on the State’s deficit is zero: the financial resources allocated are very limited (e.g. those allocated to assist loans to businesses are in the range of €2 billion) and have been re-allocated from other Government programmes. Basically, the rationale of this package is to improve the provision of credit from the banking sector to struggling businesses by assisting loans and mortgages with the guarantee of the State.


The s.c. Golden Power (e.g. special intervention power aimed at protecting strategically-relevant assets from foreign acquisition, by imposing conditions or even vetoing notified transactions) was strengthened through additional measures included in the 6 April package. Specifically:

  • Its scope was widened to include additional sectors such as banking, insurance, biomedicine, healthcare, pharma, the food industry, robotics, semiconductors, cyber security, personal data
  • The Government will be enabled to take action to prevent a hostile takeover even before the transaction is notified
  • Until 31 December 2020, the Golden Power will apply to transactions with EU entities as well, while non-EU entities will be subject to the Golden Power whenever they acquire a stake over 10% of a domestic company in a strategic sector.

Another stimulus package is expected to be passed by the Government after Easter – up to €50 billion.


Although the Government has agreed to extend the lockdown regime to certain manufacturing sites, the PM Decree of 22 March allows several kinds of factories to remain open despite the claim of Regional Presidents and the Unions asking from more severe restrictions. The PM Decree:

  1. exempts a list of sectors from the lockdown regime, and extends the exemptions to all the activities that are deemed as necessary to guarantee the continuity of the supply chains of the listed sectors
  2. allows the activities of continuous production plants, whose closure would result in serious damage to the plant or risk of accidents, and all strategic activities for the national economy to remain open.


Although the Government has agreed to extend the lockdown regime to certain manufacturing sites, according to the national business Association (Confindustria):

  1. Considering industrial production only, businesses that may stay open after the latest PM Decrees are approx. 171,000 or 42.6% of the total nationwide. They employ 1.7 million workers (39% of those employed in the industrial sector) and they account for 47% of Italy’s industrial production
  2. Considering economic activities overall, businesses that may stay open are approx. 1.9 million or 44% of the total nationwide. They employ 18.1 million workers (72% of the workforce) and they account for roughly 63% of the value added. 

On 1 April, Confindustria released its estimates of the impact of the lockdown on the economy and public finances. In particular, assuming that 90% of businesses will be back to work by the end of May, Confindustria estimates that:

  • Industrial production will fall by 20% in the first semester of this year vs. end of 2019
  • On an annual basis GDP will fall by 6%, consumption by 6.8%, investment by 10.8%, export by 5.1%, while unemployment will rise to 11.2% vs. 9.9 last year
  • Deficit/GDP will be 5% in 2020, while Debt/GDP will rise to 147%.


These are the official data which are updated on a daily basis by the Italian Government:

Tests: ~ 854,000

Overall number of people who were infected with Covid-19: 143,626

Deaths: 18,279

People fully recovered: 28,470

Confirmed cases as of 09 April: 96,877

Of the confirmed cases:

  • Hospitalised patients (showing symptoms): 28,399
  • Under intensive care: 3,605
  • In quarantine at home: 64,873


COVID-19: Focus on Italy. The Third Overview