Coronavirus, in Italy markets are in red

In Italy, the Coronavirus is hitting the financial markets today which are in red, and the measures recently adopted by the Conte government to combat the emergency and reassure businesses and families are of little use. Today the FTSE MIB index on the Milan stock exchange is losing more than 3%. The spread, the difference between the Italian BTPs and the German Bund, is also rising again, reaching 187 points (still far from the 241 points touched the days of the crisis of Conte’s first administration).

However, the Milan stock exchange is not the worst in Europe. Worse performances include Paris which loses 4.1%, Frankfurt (-3.9%), Madrid (-3.7%) and London (-3.5%). In short, after a brief breath of relief at the beginning of the week, the risk of panic on the markets that had already been seen last Friday seems to have returned. 

The loss of Piazza Affari gives a signal that is not good for the country struggling with the epidemiological emergency that has even led to the closure of schools and universities. 

What is certain is that the emergency is stopping the economy. The tourism sector in particular is suffering due to cancellations of reservations. Even accommodation facilities, public places and restaurants are struggling with government restrictions, closures or the need to organize themselves to keep people at a distance of one metre. 

Culture also suffers from the many restrictions for cinemas and theatres. Sports is even worse, forced to play behind closed doors. 

The rest is fear, with people simply avoiding leaving home because they are afraid of getting sick. 

In this scenario teleworking becomes a reality so as not to stop companies that can afford to let their employees work remotely. Schools are also organized with distance learning.

Markets and economy: the impact of Coronavirus in Italy

Unioncamere is in charge of calculating the consequences of the Coronavirus in the Bel Paese, according to which Italy risks losing 19 billion of added value. The regions in the north, where the outbreaks are most acute (Veneto, Lombardy and Emilia Romagna), are most affected. If the emergency continues until June, Unioncamere estimates losses of 37 billion euros. 

Even the scenario outlined by ISTAT does not bode well. For the Italian Institute of Statistics, the restrictions on the circulation of vehicles and people imposed by the Covid-19 emergency will be a brake on the international economy. Moreover, with negative growth rates, it is still impossible to estimate the effects of the current health emergency according to the ISTAT (Italian National Institute of Statistics). 

The Italian Government has currently adopted measures worth 7.5 billion to help families and businesses facing the emergency. These measures will have an impact on the deficit/GDP ratio and Italy has already asked Europe to be able to “exceed” the current parameters, which would go from 2.2% to 2.5%. But at the moment Europe will not provide answers. 

The general hope is that a slowdown in contagion in Italy and beyond can contribute to the recovery of the markets and the economy.