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Italy launches 'citizens' income' program

March 6, 2019

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.

A beggar with a crutch in front of a Max Mara store in Naples
Image: Getty Images/C. Furlong

Italians on Wednesday started to apply for new government welfare subsidies designed to jump-start the country's stagnant economy.

The "citizens' income" program was a key campaign promise from the anti-establishment 5-Star Movement, which entered into a governing coalition with the anti-immigrant League party last year.

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

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.

dv/sms (AP, Reuters)

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