ROME (Reuters) – Looking to save lives and stop the coronavirus by shutting down the nation, the Italian government told workers in March: you stay home and we will pay most of your lost wages.
It set aside 3.3 billion euros ($3.6 billion) for employees at small companies, and predicted 2.3 million people would sign up. Payouts on all claims would be made by the end of April. But as of April 27, the programme had helped just 29,000 workers.
Maria Valeria Guerriero, a 59-year-old widow sent home in late February from her job in a canteen in a small town in the northern region of Lombardy, is one of the millions waiting.
“It is difficult. I can’t do anything,” she said by telephone from the apartment in Cogliate where she has been holed up during lockdown, struggling to survive without her paycheck of around 800 euros a month.
“My sister lives in a nearby town. We buy food together and then we share the cost. I have asked the bank for a small loan, but it hasn’t been accepted yet,” she said. Sometimes, “when I can’t get by anymore”, she gets money from her pensioner mother.
Italy was the first European country to be hit hard by the coronavirus, and the first to order a lockdown that sent millions of workers home.
But its notorious bureaucracy has ensured that it has been slower than others to distribute aid. Charities warn that thousands of families are slipping into poverty.
“I have two children, one five and one eight years old, and we are surviving on only my wife’s small salary,” said Giovanni Titone, a hotel cleaner in Palermo on the Mediterranean island of Sicily. Even when the lay-off scheme starts to pay out, he fears it won’t be enough, with the government only committing to cover nine weeks’ wages so far.
“I’m afraid my hotel will not reopen in May,” he said. “I don’t think anybody will come to Sicily this summer.”
Other European countries have set up similar programmes for stranded workers, and are rushing to get money out. Britain’s state revenue agency, which got its scheme up and running only last week, says it is able to process up to 450,000 applications an hour, releasing cash to companies within six days.
Italy’s small business subsidy requires companies to fill out a four-page document for each furloughed worker, which is first sent to the local regional government for checks before the request can be forwarded to national welfare agency INPS.
Workers at medium-sized and large firms are covered by a separate programme for temporary layoffs, which has experienced fewer delays. But of 7.7 million placed on that scheme during the crisis, 2.7 million still have yet to receive any funds.
Treasury Undersecretary Pier Paolo Baretta acknowledged problems with the small business scheme, which was set up for the financial crisis a decade ago but had lain dormant.
“The current system is too long and does not work. We are studying how to speed it up,” he told Reuters.
Regional authorities are struggling with the paperwork. In Titone’s native Sicily, a regional government source told Reuters more than 36,000 companies had applied for the programme, but as of April 27, just 524 applications had been registered and 51 people had been paid.
A local official, asking not to be identified, said Sicily had encountered IT problems connecting with the INPS database.
Even the wealthy northern region of Lombardy, usually held up as one of the most efficient local administrations in the country but now the part of Italy hardest-hit by the virus, was slow to process applications.
By the middle of April it had just forwarded dossiers from just 37 companies to INPS. It has since sent at least 6,000 more, but still lags other regions such as Lazio around Rome, which has processed requests from 31,000 firms.
“The situation has been more difficult in Lombardy from the word go,” said Melania Rizzoli, Lombardy’s top labour official.
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Writing by Angelo Amante; Editing by Crispian Balmer and Peter Graff