The sanctions imposed on Russia are also having serious repercussions on Italian companies, especially the industry. Just think how many they reduced its turnover by cutting off all trade relations with Moscow. The European Union, in fact, is ready to give the green light to new economic aid and to the package of measures prepared by Itamaraty on how to distribute them to Italian companies in difficulty due to the conflict in Ukraine. I’m about 13,000 who work in the war territories and they have to deal with losses and significant declines in turnover.
Funds to help Italian companies
Farnesina has granted loans with subsidized rates and state guarantees and non-refundable grants, which will reach up to 40% for a maximum of 400,000 euros. These funds will go to companies that in the last three years, 20% of the company’s total turnover derives from export operations aimed at Russia, Belarus and Ukraine and will allow them not to close their business and assess new markets to orient themselves. Both measures are based on the resources allocated with the Budget Law and on the reactivation of the capitalization line (to include in fact also Italian companies that export to the countries involved in the war) of the Fund 394/81, a fund managed by Simest on behalf ofMinistry of Foreign Affairs and International CooperationANDdedicated to low interest loans to facilitate the international development of Italian companies, in particular SMEs.
Sectors of Italian industry weakened by the war
After the green light from the European Commission, the government will be able to issue a specific decree or insert the measures in the decree scheduled for the week to face the economic emergency, enable companies to deal with increases in energy and raw materials and encourage the search for alternative sources. Assistance is foreseen, above all, in the mechanical, fashion and agri-food sectors. According to data from Confartigianato, Italy ranks fourth among European countries in export value in the Russian and Ukrainian market: in 2021, it recorded sales of 9.8 billion euros. In the fashion sector, the country leads with exports equal to 1.4 billion euros.
Tax wedge cut hypothesis
Returning to the decree for new aid, given the breakdown of the 6 billion euros available and which has already been partially outlined in the Economic and Financial Document (Def) 2022. Without resorting to budgetary changes, available resources will be allocated to five major objectives: reinforce funds for credit guarantees, cover the rise in prices of raw materials used in public works, compensate for expensive energy, provide relief to Ukrainian refugees and, finally, provide additional support to sectors weakened by the pandemic. But a hypothesis on the table of introduction of new tools, such as a new cut in the tax burden, a kind of phase two of the operation initiated with the maneuver (reduction of contributions of 0.8 points in benefit of workers up to salaries of around 35 thousand euros per year, excluding domestic workers and caregivers). The proportions of the measure must also be the same: the assumption that funding is around one billion euros.
Political confrontation over the decree
The government’s objective is to support workers and increase their purchasing power, which – with inflation continuing and all the difficulties associated with the conflict in Ukraine and the aftermath of the pandemic – has been significantly reduced. Carlos Bonomi, president of the Confindustria urged the government to cut the cost of labor more significantly, but according to experts this would require an intervention of 16-18 billion euros. In addition, it is still an option that is not foreseen in the Def and it is not even mentioned that it will enter the decree. Also considering the political game that is taking place at this level: the League is asking for more resources against high bills and in aid of companies facing the energy crisiswhile Pd and M5S think about the introduction of a minimum wage and the distribution of salary increases from national collective agreements.