Italy's Aiding Package to Be Approved on Friday

Italy's aiding package for the domestic struggling automakers will be announced on Friday, Prime Minister Silvio Berlusconi said yesterday but refused to provide more details about included sums or incentives. However, we do know the government is willing to provide a “sizeable” package to the auto industry, according to Autonews quoting Berlusconi. Industry Minister Claudio Scajola confirmed the stimulus package is expected to be approved on Friday but he also refused to detail the funding.

Helping ailing automakers is an extremely important task for the Italian government as local car manufacturer repeatedly insisted that thousands of jobs could be at risk without financial support. Fiat CEO Sergio Marchionne said in late January that companies are still expecting help from the government because a funding package for the automotive industry could help the national economy and not only the involved companies.

"We expect help from the government for the entire car sector. It's not about helping Fiat but restarting an entire sector and the whole economy,” Marchionne was quoted as saying by Autonews.

The Italian government did not mention how it plans to help struggling automakers but officials will likely rely on cash incentives and low-interest loans, similar to other countries. In addition, several tax reductions are often likely to be announced on Friday in order to encourage domestic automakers invest in new technologies to reduce fuel economy and emissions.

Meanwhile, problems continue for Italian carmakers. Fiat yesterday confirmed it will idle its biggest Italian plant for 2 weeks due to falling new car demand. The Mirafiori workers will remain at home until March 13, according to information provided by Autonews, but the company did not mention whether it plans to pay their salaries or not.