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Italy paralyzes its economic lung against the coronavirus

2020-03-08T14:16:23.499Z


FOCUS - The measures announced by the Italian government will disrupt the activity of the three regions which are among the most dynamic and attractive in the country, including Lombardy.


It is an extraordinary decision, justified by an epidemic which continues to spread in Italy. On the night of Saturday March 7 to Sunday March 8, Rome announced the quarantine of the whole of Lombardy, the richest and most dynamic region of the country, as well as part of Veneto and Emilia-Romagna. It is a decision fraught with consequences, notably confining the cities of Parma, Venice, a world center of tourism, and Milan, the economic capital of the Boot. More than 15 million Italians, or almost a quarter of the population, have to adapt: ​​only travel that meets “ duly verified professional requirements and emergency situations, for health reasons ” is authorized , the others being strictly limited until April 3.

Read also: Coronavirus: everything we know about the disease

In detail, the decree paralyzes schools and universities in particular, and prohibits cultural, sports and religious events. In addition, several establishments, including nightclubs, theaters, cinemas and ski resorts, had to close. Conversely, bars and restaurants can remain open, as can places of worship, but the text imposes drastic conditions on them. The choice to limit movement in these regions is not trivial: these three territories account for 85% of cases and 92% of deaths caused by the coronavirus.

  • Three of the most populated regions in Italy

Geographically, Italy is divided into several regions, such as Lazio, where Rome is located, and the Marche. The regions concerned by the decree of March 8 are Lombardy (whose capital is Milan), part of Emilia-Romagna (whose capital is Bologna) and Veneto (whose capital is Venice).

The map of regions under quarantine

Lombardy alone has 1,523 municipalities and slightly more than 10 million inhabitants, or almost a sixth of the Italian population, including 1.36 million in Milan itself, according to the Italian INSEE, Istat. It is the third most populous region in Europe, after Île-de-France and Baden-Württemberg in Germany. Opposite, Veneto has 4,905 million inhabitants, and Emilia-Romagna has around 4.46 million inhabitants. Only Sicily, Lazio - including Rome - and Campania - with Naples - are more populated.

The difficulty comes from the fact that the elderly population is large there: 545,000 people are 65 and over in Veneto, or 11% of the total. In Lombardy, this proportion rises to 19%, 1.92 million people. However, these elderly populations are more sensitive to the coronavirus and must be particularly protected or taken care of quickly in case of problems. A vulnerability that explains why extraordinary measures could be taken.

  • The economic lung of Italy and one of the European financial centers

These three regions are among the most economically important in the country. Lombardy alone produces 20.6% of Italian added value, and the territory remains the first economic region of the Boot and the fourth in Europe. Also affected, Veneto, which benefited from the " Italian economic miracle ", has a GDP weighing 9.4% of the national total. In all the indicators making it possible to judge the dynamism of a territory, these three regions are above the national average.

The dynamism of the three regions affected by the decree in figures Le Figaro, Istat, Eurostat

The dynamism and attractiveness of Lombardy allowed it to keep an unemployment rate well below the country average, at 6% in 2018 against 10.6% on average in Italy and more than 20% for certain regions of the south , including Sicily. The power of the region has been built over time, first on agriculture, then on the installation of many industries, heavy as well as light. Iconic brands have emerged, such as the car manufacturer Alfa Romeo or the luxury giants Versace and Dolce & Gabbana. The region then diversified, particularly in the tertiary sector, making it one of the most dynamic in Europe, with one of the highest entrepreneurship rates on the continent, i.e. 74 companies per 1000 inhabitants. Lombardy can count on many sectors, ranging from pharmacy to footwear, via metallurgy or business tourism. Milan occupies an overwhelming place in this landscape: the city hosts 40% of the total number of businesses in the region, explains the European Union, and the capital also hosts the most important financial center in the country. The regional capital is also a focal point of the world of luxury and fashion in the world.

Read also: Coronavirus: already anemic, the Italian economy is likely to sink into recession

Opposite, Veneto has developed spectacularly in recent decades, focusing in particular on industry in certain cities such as Verona, Vicenza or Rovigo. It also has dynamic and exported agriculture. Emilia-Romagna also bases its strength on a combination of resistant agriculture as well as first-rate manufacturing centers, such as the food industry or the automobile industry.

Lombardy also took advantage of its location, at the gates of France and Switzerland, to become the main national commercial HUB. In 2018, the region had gathered more than 27% of national exports, in value, against 13.6% for Veneto and a similar value for Emilia-Romagna. These three regions are by far the centers of Italian trade. Currently, however, the industrial strength of these areas is being jeopardized by the epidemic, which is deeply disrupting supply chains and trade with China.

  • A huge blow for tourism

The sector weighed for around 12% of Italian GDP in 2015. If 52.4 million tourists arrived in Italy in 2016, this number has since risen to 62 million, making the country the 5th world destination, just behind China but far ahead of Turkey. However, the three regions affected by the closure, including Veneto, receive a significant part of arrivals: Lombardy attracted around 39.4 million overnight stays in 2017, compared to 69.2 million for Veneto and 40 million for Emilia -Romagne. By comparison, the capital region, Lazio, recorded only 33.8 million in the same year, and Tuscany 45.9 million.

Closing these regions therefore amounts to jeopardizing a tourism sector which has already been severely affected in recent weeks by the epidemic. These three regions could previously count on their treasures, such as the Carnival of Venice, the Doge's Palace or the Duomo of Milan. But now tourists are fleeing them: in early February, the Italian institute Demoskopika estimated that the coronavirus could take around 14.6 million overnight stays in the country, a loss estimated at 4.5 billion euros for the sector. These figures will have to be revised considerably upwards, the epidemic having spread since then.

Read also: Coronavirus: how the actors of tourism in Italy adapt to the epidemic

  • A "

Result: the Italian measures, described as " courageous " by the World Health Organization, are also, economically, a " real sacrifice " which could cost the country dearly. This expression was, moreover, assumed by the Prime Minister, Giuseppe Conte, who declared that " these measures will cause inconvenience and impose sacrifices. But now is the time to be responsible ”to eradicate the disease.

One thing is certain: the 7.5 billion euros plan announced by Rome to support the economy and the health system, validated by Brussels on Saturday, should be insufficient, despite doubling it compared to 3.6 billion euros. initial euros. And, if the country was already in difficulty before the arrival of the epidemic, its situation now becomes worrying, once its economic lungs in trouble. Revised in recent weeks, growth forecasts were all forecasting a sharp slowdown in the Boot, a situation that should worsen with this latest development.

In addition, the Italian decision risks having international consequences for its business partners. It remains to be seen how the companies established on site will adapt to this situation, and how the situation will evolve. France is particularly concerned, being Italy's second supplier and second customer as well as its first investor.

Source: lefigaro

All news articles on 2020-03-08

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