Italian workers still waiting for their wages two months into lockdown

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By Richard Good
Virus Outbreak Italy Reopening
Virus Outbreak Italy Reopening   -  Copyright  Cecilia Fabiano/LaPresse

Italian Prime Minister Guiseppe Conte has apologised to thousands of furloughed Italian workers who are yet to receive state aid more than two months since the country's lockdown began. 

In a message posted on Facebook, Conte said: “I apologise on behalf of the government and I promise will continue to work to ensure that payments are made as quickly as possible.” 

The government promised to pay over two million workers their wages after imposing a national lockdown on March 9.

But the payment scheme has overloaded Italy’s bureaucratic machinery, Filippo Taddei, Professor of International Economics at Johns Hopkins School of Advanced International Studies, says.

“Italian workers can benefit from either unemployment insurance or short-time working. These schemes cover workers in large companies and manufacturing," he said. 

"It doesn’t cover small companies within the service sector which are most heavily hit by the crisis."

Taddei said that the government had decided to expand the purpose of the programme to those workers in small companies, but it can take between 30 and 45 days to reach claimants. 

"Obviously right now with the surge in applications, it can take even longer.”

Taddei added that Italian banks have proved unwilling to step into the breach.

“What the government has tried is to say why don’t you go the bank and ask for a little bit of a loan and that loan will be backed by the treasury and you will get the money sooner,” he said. 

“But banks are resistant to that because obviously they are already over-exposed.”

Surprisingly enough unemployment in Italy dropped in March because the short-time work schemes are conditional on people keeping their employment relationship in place.
Filippo Taddei
Professor of International Economics, Johns Hopkins School of Advanced International Studies.

Despite the delays, Taddei says that confidence in the government scheme remains strong.

“People are worried about their future but they are not worried about not getting the money,” he said. 

“And for once this money is in fact working for the better. Surprisingly enough yesterday it was announced unemployment in Italy dropped in March. And why is that? Because the short-time work schemes are conditional on people keeping their employment relationship in place.”