Italy: the scars of lockdown will long outlast the virus

Italy began its long road out of lockdown this week. But as the immediate health crisis recedes, the scars of the lockdown are becoming ever clearer. The economic toll has been particularly acute in the south, and it is starting to push one of Europe’s regions over the precipice.

Though Italy’s coronavirus outbreak was among the worst in the world – resulting in over 29,000 deaths at the time of writing – the epidemic was overwhelmingly confined to the more prosperous north.

According to Italy’s statistical agency, ISTAT, excess deaths in the northern regions were 95 per cent higher than the average of the past five years. In contrast, in the southern regions, excess deaths rose by just two per cent. Nevertheless, the south was subjected to the same nationwide lockdown – one of the longest and strictest in the world.

When it came to the south, the Italian government was faced with an impossible choice. The healthcare system is far less developed in the south. The national and regional politicians were terrified that it would have struggled to cope with anything like the health disaster the north experienced. Whether the lockdown was the right decision or not. it has hit the south like a perfect storm.

Southern Italy – the six regions and two islands south of Rome – has been struggling economically for a long time. Pre-coronavirus unemployment was at 18 per cent – three times that in the north. Meanwhile, youth unemployment was 50 per cent. As the mayor of Messina in Sicily recently put it: ‘We don’t start from zero. We start from less than zero.’

Tourism and hospitality are major employers in the mezzogiorno. And they have been hit particularly hard by the lockdown – not just by Italy’s own restrictions but by travel bans across the world. Revenue from tourism fell by 95 per cent in March. UBS forecasts that tourist spending will fall by €20 billion this year. While in the north factories have started reopening as the lockdown eases, the tourist trade, bars and restaurants will take much longer to recover.

Museums and retailers are due to open on 18 May, bars and restaurants on the 1 June. But the footfall will not be the same without international visitors. Sicily’s regional government is planning to spend €75million on luring international and domestic tourists back to the island. This is set to include offering one night of accommodation in a three-day trip for free. Reports suggest the state could pay 50 per cent of tourists’ flight costs, such is the desperation to revive a semblance of normality.

Another factor which has hit the south hard is the prevalence of the informal economy. Italy is estimated to have 3.5million ‘invisible’ workers, representing around 12 per cent of GDP. Most of these off-the-books workers live in the south. This meant that when the crisis came, millions were ineligible for government relief packages aimed at salaried workers.

The Italian government has pledged €400 billion to help businesses and people through the crisis. But the money has been slow to reach even those who are entitled to support. ‘The state was absent here’, one resident of Naples told the BBC. He set up a socially distant food bank, lowering baskets from his balcony to collect and distribute donated food. ‘State bureaucracy doesn’t allow aid to come directly to the people’, he said. ‘If everything goes well, we might recover in a year. But in the meantime, how do we live?’

In the absence of the state, many are turning to the mafia, who are offering loans and food to desperate families – with strings attached down the line, of course. Since the lockdown began, the number of people calling a helpline which supports victims of exploitation has increased by 100 per cent. Small businesses are particularly vulnerable to mafia exploitation as they can be used to launder money.

‘Right now, my business is sinking’, a restaurant owner in Palermo told the BBC. ‘And when someone throws a life vest at you, you can either choose to drown with your ideals, or swim’, he added. The government is offering loans of up to €25,000 to businesses in need. But the state loan comes with conditions: ‘It would be impossible to pay it back. All shops that are going to reopen will have to follow social-distancing rules. This means fewer clients and much less money.’ A return to normal is a long way off. And for those desperate enough, the mafia’s offer of immediate cash is more attractive.

What the experience of southern Italy tells us is that the economic catastrophe of lockdown continues to blight the lives of millions, even in places where the virus never truly struck.

Fraser Myers is a staff writer at spiked and host of the spiked podcast. Follow him on Twitter: @FraserMyers.