They are the new poor’: Covid-19 fuels rising poverty in Italy

Patience wears thin over slow pace of economic help for businesses and individuals hit by hardship

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Angela Giuffrida in Rome

Mon 29 Jun 2020 05.00 BSTLast modified on Mon 29 Jun 2020 05.01 BST
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A restaurant lies empty at lunchtime in Rome
A restaurant lies empty at lunchtime in Rome. Only 30% of businesses in Italy have received funds promised during the lockdown. Photograph: Alessandro Serranò/AGF/Rex/Shutterstock
The queue at a soup kitchen in the Trastevere district of Rome moves at a much slower pace than it did before Italy’s coronavirus outbreak, owing to physical distancing rules. But it is also much longer.

“We have gone from serving around 300 meals at a time to 500,” said Lucia Lucchini, who manages the kitchen run by the Catholic charity Sant’Egidio.

“There were some very difficult days at the beginning of the lockdown, with many homeless people coming here who were afraid as they didn’t understand what was happening – some were even fined for being on the street. Then we started to see people who hadn’t come before, those who had lost their income and who had no family to turn to.”

The new faces are among the 1 million Italians who will be pushed into poverty this year as a consequence of the coronavirus pandemic, according to estimates from Coldiretti, the farmers’ association.

“What is happening is right before everyone’s eyes,” said Lorenzo Bazzana, an economic adviser to Coldiretti. “Families who perhaps were not in difficulty before are now shouldering a very heavy economic burden and are turning to food banks for help.”

Not too far away from the Trastevere soup kitchen is Casino del Bel Respiro, a 17th-century palace where the Italian prime minister, Giuseppe Conte, this month hosted talks aimed at salvaging the country’s economy, after which he said Italy was likely to exceed a projected deficit of 10% of domestic output, and that measures to avoid layoffs and help struggling sectors such as tourism could not wait until September, when the government will present a comprehensive plan to relaunch the economy.
But for businesses and individuals desperately needing immediate financial support, Conte’s words amount to little more than fluff.

Italy’s slow and obstructive bureaucratic system has meant that only 30% of companies have received funding promised to them during the lockdown, and many business owners are still waiting for state-backed bank loans. Meanwhile, thousands of workers are yet to receive payments owed as part of a furlough scheme.

“There is a huge amount of delay in terms of payments to companies and individuals,” said Wolfango Piccoli, the co-president of the London-based research company Teneo. “And while everyone is focusing on the big figures, at the end of the day what really matters, especially for the weakest members of society, is the state’s capacity to deliver the money. In Italy there is a big problem with state capacity.”

As leaders grapple with the economy, much of the onus has fallen on charities and community groups to support those experiencing hardship. In Rome, many supermarkets have adopted the “spesa sospesa” (deferred shopping) initiative, whereby shoppers can buy groceries which charities then deliver to the poor.

Last week, Pope Francis established a fund aimed at helping families in the city who are struggling.

Volunteers at Nonna Roma, a community group, now regularly deliver food parcels to 7,500 families, compared with 300 before the pandemic.

“They are the new poor,” said Alberto Campailla, one of the volunteers. “Among them are domestic workers who lost their jobs, or people who were doing precarious work … but also young professionals who have a drastically reduced income.”

Campailla said the government should try to expand its basic income scheme, which was rolled out last year, and help people with rental payments.

“There is a serious risk of many people not being able to keep up rental payments and losing their homes,” he said.

Customers are thin on the ground for this souvenir shop in Rome
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Customers are thin on the ground for this souvenir shop in Rome. Photograph: Alessandro Serranò/AGF/Rex/Shutterstock
If the EU recovery fund is approved, the money will not be shared out until 1 January. In return, member states must ensure the funding is not wasted while committing to making changes and investing in projects that bring economic growth.

Until then, the only possible funding Italy could access from Brussels is via the Sure programme, which mainly provides additional cash for furlough schemes.

Many shops and other businesses across Italy have not reopened since lockdown measures were eased. Those that have are struggling to make ends meet.

“A lot of our business comes from hotels or events, such as weddings, which have been cancelled,” said Enzo Russo, who owns a florist with his wife, Antonella, in Rome’s Esquilino neighbourhood. “We need a strong response from the government, if it continues like this it could be very dangerous.”

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Gianpaolo Grilli, whose family-run furniture business is nearby, said: “I don’t have much faith in the talks that are happening. Italy is full of small businesses that have not only provided the economic backbone, but social solidity. Politicians haven’t understood this. We don’t want handouts, we want laws that enable us to plan and invest.”

Although the economic impact of the pandemic is already evident, Piccoli predicts the real damage will not be felt until the autumn. Italy is set to lose billions in essential revenue from tourism this year. Up to 40% of small- to medium-sized firms are forecast to disappear. A wave of layoffs is expected once a ban on companies firing people is lifted in August, and the furlough scheme ends in October.

“Regardless of the amount of money that could come from Brussels, the prospects are pretty dire,” said Piccoli. “And I don’t think this government has the ability to put together a holistic, comprehensive, credible and effective plan.”