When the COVID-19 pandemic forced Roberto Ferraro to shut the patisserie he runs in Amelia, a scenic hilltop town in central Italy, he had just rented out a new site to increase production of ice cream and start selling it abroad.
Ferraro would like to be preparing his business to reopen in the weeks to come, working out how to secure supplies and ensure social distancing among customers. Instead, the 51-year-old is devoting his time and energy to wading through the pile of documents he must file with banks to tap state-guaranteed loans.
Italy, the first Western nation to shut down, is now in the vanguard of moves to cautiously reopen its economy. From May 4, shops like Ferraro’s can provide takeaways, and they will fully restart from June 1.The government says debt guarantees made available by the state can unlock up to 740 billion euros in funding for businesses which have been crippled by a seven-week lockdown.
“One of the most controversial aspects of the measures is the impression the government gave that the money was just sitting there and all people had to do was turn up at their bank,” said Salvo Politino, deputy president of business lobby Unimpresa.The Italian Treasury declined to comment. That represents a big cultural shift for an industry that has spent most of the past decade sweeping balance sheets clean of unpaid loans after coming under fire from supervisors for lending too freely.
At the other end of Italy’s boot, Michele Mandala has also been told to wait a month for the money he needs because he does not expect to be able to reopen his cinema theatre in the Sicilian town of Caltanissetta until after the summer. Lenders say they face legal risk under Italian law because they can be held liable for credit abuse or aiding bankruptcy if a debtor defaults.
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