March 5, 2020 / 5:29 PM / a month ago

UPDATE 1-Italy doubles money pledged to fight coronavirus

(Updates with details, background)

ROME, March 5 (Reuters) - Italy said on Thursday it was doubling the sum it initially planned to tackle its coronavirus outbreak, saying funds were urgently needed to help the health service as well as families, firms and workers.

Economy Minister Roberto Gualtieri told a news conference the government would spend 7.5 billion euros ($8.40 billion) and ask the European Union for the go-ahead to hike this year’s deficit goal, currently set at 2.2% of gross domestic product.

The new target of around 2.5% of GDP will first need to be approved by parliament in a vote expected for next week.

Italy has been the European country hardest hit by coronavirus, with 148 deaths and 3,858 cases since the outbreak emerged two weeks ago.

On Sunday the minister had promised a smaller package worth 3.6 billion euros, a sum which the opposition and much of Italy’s media deemed inadequate.

“Nobody must lose their job because of coronavirus,” Gualtieri said, promising a moratorium on credits held by banks in the worst affected areas.

The draconian measures introduced to try to contain the highly infectious disease are taking a heavy toll on an economy which was already close to recession, with a huge immediate hit to tourism.

Industry lobby Confindustria is predicting a fall in gross domestic product in both the first and second quarters of this year.

Confturismo has forecast a drop of some 32 million in the number of Italian and foreign tourists in March-to-May, with a loss to the industry of about 7.4 billion euros. ($1 = 0.8930 euros) (Reporting by Giuseppe Fonte; writing by Gavin Jones, editing by Crispian Balmer)

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