Health & Education

Italy Quarantined

COVID-19 Fears Spread Beyond Lombardy and Veneto

The COVID-19 crisis is raising the specter of economic stagnation in Veneto and Lombardy.

Since the first local transmission of the new coronavirus was confirmed in Lombardy on 21 February, the number of reported cases in Italy has grown exponentially, making the country the biggest COVID-19 epicenter in Europe.

In addition to Lombardy and its capital, Milan, the northern regions of Veneto and Emilia-Romagna have also been hit hard by the virus epidemic.

The Italian government was forced to impose travel restrictions in the north, including in the cities of Venice and Milan. On 9 March, the lock-down was enforced nationwide, affecting the lives of over 60 million citizens.

But the virus continues to spread rapidly despite the preventative measures. As of 10 March, Italy has reported 9,172 cases of COVID-19, becoming the second worst affected country in the world after China.

Efforts to contain the virus have disrupted the rhythm of life across the nation and particularly in northern regions, wreaking havoc on business and the Italian way of life. The country’s soccer league, Serie A, resumed with no fans in the stadiums this week, while many other sporting events were canceled altogether.

To slow down the outbreak, all schools and universities have been ordered to close down until 15 March, though it is very unlikely that there will be business as usual by mid-March. Venetian schools were among the first in the country to close.

Although the strict measures were initially intended to contain the virus in the northern regions, COVID-19 has already spread to all corners of the country. The government is now trying to slow down the spread of the virus to spare the health system from going into overload, according to Prime Minister Giuseppe Conte.

People, especially the sensitive groups, have been advised to refrain from unnecessary outings and gatherings, which has made the bustling city centers of Venice and Milan far less crowded than usual. An increasing number of citizens are taking time off from work to stay safe.

Bars and restaurants across Veneto have lost hundreds of daily customers, while hotels are challenged by thousands of cancellations. Major American airlines, meanwhile, have canceled their scheduled flights to Italy until April 24, following the US State Department’s advice against traveling to Lombardy and Veneto.

With over 5.5 million American tourists visiting Italy each year, the US is the second largest source market for Italy’s tourism, and the recent travel restrictions could be a heavy blow to the sector.

Italy’s tourism industry may lose over EUR7.4 billion to the coronavirus epidemic, which will be felt more in northern regions such as Veneto whose economy heavily depends on tourism.

Last week, Italy’s Ministry of Economy announced its plan to pump EUR7.2 billion into those regions and industries which are hit hard by the COVID-19 epidemic, pending the approval of the parliament and the EU.

EU decision-makers in Brussels generally dislike unplanned extra spending as it undermines the strict budgeting rules for member states, pushing the bloc to the brink of budget deficit. And, as the rest of Europe is bracing for COVID-19 outbreaks, the mood in Brussels is far from cheerful at the moment.

Italy had previously proposed a EUR900 million relief plan to assist the quarantined towns in Lombardy and Veneto.

On 7 March, however, the EU gave tacit support to the plan. “Italy’s stimulus plans to cushion the economic impact of the coronavirus outbreak won’t be factored in when assessing the country’s compliance with the European Union’s fiscal rules,” according to Bloomberg.

A more comprehensive assessment of the situation, however, will be possible when the coronavirus epidemic has—hopefully—died out, which may be a few weeks away.

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