EU coronavirus snub: Brussels fines Italy £7MILLION despite outbreak

On Wednesday, Italy imposed sweeping nationwide restrictions on travel and public life, in a desperate attempt to contain the coronavirus outbreak that looks set to plunge the world’s eighth largest economy into a steep recession. The measures announced include travel restrictions on 60 million residents, a ban on public events, the closure of schools, cinemas, museums and gyms, restaurants, bars and shops. The Italian government took action as the number of deaths caused by coronavirus had then reached 827 (now 1,266) and infections topped 14,000 (now 17,660).

The restrictions are in place until at least April 3.

Jack Allen-Reynolds, senior Europe economist at Capital Economics, told CNN that Italy’s economy will contract sharply in the first half of the year – even if the restrictions are lifted at the end of April, with GDP declining about 2 percent for all of 2020.

The hit to GDP will be “much bigger” if the restrictions are extended until the end of June, he added.

He said: “This does not take into account the impact on the banking sector.

“The spillovers from the impact of the virus on other parts of the eurozone, or the potential supply-chain disruption if the virus really takes off in Germany and other key trade partners.”

Responding to criticism that the EU has been slow to help, president of the European Commission Ursula von der Leyen made a speech on Wednesday, claiming Brussels will stand with Italy.

However, in the midst of what has been dubbed the worst health and economic crisis of our generation, the European Court of Justice – the body that has the task of ensuring compliance with European law – fined the boot-shaped country £6.8million for not having fully recovered the state aid granted to the Sardinian hotel sector in 2008.

Aid deemed illegitimate because it “causes distortions of the principle of competition within EU law”.

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In the early 2000s, the Italian state granted various loans to the Sardinian hotel sector.

However, in 2009, the EU established Italy needed to recover the aid provided (£12.4 million) by the entrepreneurs.

In 2012, the first action for failure to fulfill obligations was initiated on a proposal from the European Commission.

The second one was triggered six years later, given the non-compliance with the recovery deadlines set for September 2014.

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At the time, Rome claimed that getting back the money granted to Sardinian hoteliers was “impossible”, given the many years since the disbursement of the funds.

But The European Court of Justice says Italy did not demonstrate the impossibility of recovering the sums and, while acknowledging the efforts made in recent years, spoke of a serious and lasting infringement, such as to have caused a distortion of competition.

In addition to the £6.8 million fine, the EU flanked another £72,000 for each additional day of delay.

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