In Italy, the Coronavirus outbreak that has killed 463 people and forced the government to restrict movement for its 60 million citizens.
The government imposed on Tuesday travel restrictions and a ban on public gatherings to help fight the spread of a disease that has infected more than 9,000 people in the Mediterranean country in just over two weeks.
The Milan market steadied itself after falling by more than 11 percent on Monday and was up fractionally on broader expectations of a coordinated global government response to the rapidly unfolding crisis.
Ministers said they would also ask the European Union to allow Rome to raise its deficit spending beyond the 7.5 billion euros ($8.5 billion) planned to help businesses hurt by a sharp drop in tourism over the past month.
Some banks expect Italy’s economy to contract by 1.0 percent between April and June.
“We are worried about this and for this reason we pushed the banking system to give as much as possible (on the) suspension of mortgages,” she said.
Economists at Citi said the latest round of Italian restrictions is likely to result in “a sharp contraction similar to the 2008-09 recession”.
“It remains very difficult at this stage to gauge the extent of the decline, but this will most likely much bigger than our original estimate of 0.5-0.6 percent,” they said in a research note.
Rome aired plans last week to inject 7.5 billion euros ($8.5 billion) into the economy to help businesses to get by in the coming weeks and months.
But Economic Development Minister Stefano Patuanelli said “seven and seven and a half billion are not enough to face down the crisis”.
Patuanelli told Italian radio that Rome was working on a proposal to ask Brussels to raise Italy’s spending by around 10 billion euros.
That accounts for about 0.6 percent of Italy’s gross domestic product.
Italy needs special EU permission to spend more than allowed under the bloc’s strict budgetary rules for its 27 member states.
Patuanelli’s comments came as EU leaders prepared to hold an emergency video-conference on Tuesday aimed at coordinating their response to the outbreak.
