Italy's populist government has launched its citizens' income welfare program designed to reduce poverty and unemployment. The scheme helped spark tense budget negotiations with the EU.
Image: Getty Images/C. Furlong
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Italians on Wednesday started to apply for new government welfare subsidies designed to jump-start the country's stagnant economy.
The program, essentially a new system of welfare and unemployment benefits, provides those eligible with €780 ($882) credited to monthly, prepaid debit cards to pay for groceries, pharmaceuticals, utility bills, rent and other essentials. In exchange, able-bodied participants enroll in a job-finding and job-training program.
Italian Prime Minister Giuseppe Conte predicted that the scheme would be a major boost to the country's economy, "It will have a positive impact on domestic demand."
Italy, the eurozone's third-largest economy, currently has the third-highest unemployment rate in the EU, reaching 10.5 percent in January, according to EU statistics.
Italy insists on a guaranteed basic income
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Who is eligible?
Italian or EU citizens, or legal residents who have lived in Italy for at least 10 years and whose annual household income doesn't exceed €9,360 euros
Participants cannot own pleasure boats, second homes worth more than €30,000 or have bought a car in the six months prior to applying.
Able-bodied workers must sign up for job placement or training programs. The first job offer is to be located within 100 kilometers of home, the second offer within 250 kilometers and the third anywhere in Italy, with some exceptions.
Costly initiative
The program is expected to cost €7.1 billion this year, €7.8 billion in 2020 and €8.0 billion in 2021.
The initiative caused friction with the European Union last year and led to heated budget negotiations between Rome and Brussels. The EU fears that high public spending will increase Italy's public debt — currently about 133 percent of GDP, second-highest in Europe behind Greece and more than double the EU's debt ceiling of 60 percent of GDP.
However, Italian Deputy Prime Minister Luigi Di Maio, who is also the leader of the 5-Star Movement, cited the need to kick-start the economy and create jobs. He said Wednesday that with the launch of the citizens' income, a "revolution" had begun for an estimated 5 million people.
"Today we are keeping a promise, the state is finally looking after the invisibles," Di Maio told RTL radio.
Italy's populist government: Key players
After months of negotiations, Italy finally has a government with Giuseppe Conte at the helm. Conte's swearing in ended weeks of turmoil that rocked financial markets, but concerns among Italy's EU partners remain.
Image: picture-alliance/ROPI
Conte: Novice at the helm
Giuseppe Conte, a little-known law professor with no political experience, was picked by the League and 5-Star Movement (M5S) as their candidate for prime minister. He was forced to temporarily give up his leadership bid after the parties' cabinet selection was initially blocked. However, after the two parties struck a deal with President Sergio Mattarella, Conte was eventually sworn in on June 1.
Image: picture-alliance/dpa/S. Lore
Mattarella: President with the final say
President Sergio Mattarella faced calls for his impeachment after he prevented the populist alliance from taking office. He singled out its choice for finance minister, Paolo Savona, warning that an openly euroskeptic minister in that position went against the parties' joint promise to simply "change Europe for the better." After the parties agreed to replace Savona, Mattarella gave the go-ahead.
Image: Getty Images/AFP/A. Solaro
Di Maio: Anti-austerity advocate
M5S chief Luigi Di Maio secured his party 32 percent of the vote in the March election. With the populist M5S-League coalition in power, Di Maio assumed the role of joint deputy prime minister and took over the economic development portfolio. The M5S leader has come under fire for his anti-immigration rhetoric, including calling rescue missions to save migrants from drowning a "sea-taxi service."
Image: Getty Images/AFP/T. Fabi
Salvini: 'The Captain'
Matteo Salvini is the leader of the anti-immigrant, euroskeptic League, which won 17 percent of the vote in the March election. A former MEP, he and his party have no experience in governing. Salvini has taken on the position of interior minister within Conte's Cabinet. Known for his hostile rhetoric toward immigrants and the EU, Salvini once described the euro a "crime against humanity."
Image: picture-alliance/AP Photo/A. Di Meo
Savona: Anti-euro radical
Paola Savona, initially tipped to lead the Finance Ministry, has called the euro a "German cage" and said that Italy needs a plan to leave the single currency. The 81-year-old's stance won him the backing of most Italian lawmakers but that wasn't enough to stop his appointment being vetoed. In his place steps Giovanni Tria, an economics professor without any previous government experience.
Image: Getty Images/AFP/F. Frustaci
Cottarelli: Temporary caretaker
Carlo Cottarelli was set to become Italy's caretaker prime minster after the M5S-League alliance failed to have its controversial cabinet picks approved. The former IMF economist's time in the spotlight was short-lived, however. Political uncertainty in Italy rocked Europe's financial markets and prompted Mattarella to swiftly renegotiate and approve Salvini and Di Maio's governing coalition.
Image: picture-alliance/NurPhoto/S. Lore
Berlusconi: Vanquished enabler
Silvio Berlusconi (right) and his Forza Italia entered a four-party electoral alliance including League in the March election that secured the bloc 37 percent. Berlusconi is now upset at his right-wing ally Salvini after the League leader moved to work with M5S. Berlusconi has said he would act as a "reasonable and scrutinizing opposition."
