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Article Italy: New Law Provides Additional Emergency Measures to Tackle COVID-19 Pandemic

Italy has taken additional measures to address the effects of the COVID-19 pandemic on the economy, unemployment, health services, and the young by enacting Decree Law No. 73 (D.L. No. 73, or “Decreto Sostegni Bis”), which entered into effect on May 26, 2021.

The new legislation allocates funds for combating the persistent negative financial impacts of the pandemic on the country. A number of important economic incentives are listed below.

Grants for Professionals, Artists, and Others

D.L. No. 73 creates grants for those engaged in business, the professions, the arts, or agriculture who have been adversely affected by the pandemic. They must have an active value-added tax number as of the date of the new legislation and have not obtained a grant before. (Arts. 1.1, 1.5, 1.16.) The benefit may be requested online from the tax office within 60 days from the date of the new legislation. (Art. 1.13.) The total amount allocated by the legislation is €11.4 billion (about US$13.5 billion) for 2021. (Arts. 1.4, 1.14.) A beneficiary cannot receive more than €150,000 (about US$178,000). (Art. 1.21.)

Measures for Development of Alternative Business Financing Channels

To ensure alternative channels of financing, the government will provide guarantees on bonds issued by companies employing a maximum of 499 workers to foster the implementation of qualified business development programs. (Art. 15.1.) Each company may receive from €2 million to €8 million (about US$2.4 million to US$9.5 million) during 2021. (Art. 15.2.)

The law also includes measures to sustain the liquidity of companies and exempt shareholders of innovative start-up companies from capital gains taxation on sales of shares. (Arts. 13.1, 14.1.) 

Liquidity Fund for Payment of Commercial Debts of Local Authorities

This fund is increased by €1,000 million (about US$1.2 billion) for 2021, to ensure the payment of certain debts, liquid and due, owed by local authorities, regions, and autonomous provinces for debts other than those of a financial or health nature. (Art. 21.1.) 

Refinancing Fund for Assistance of Large Companies and Continuity of Air Passenger Transportation

This fund is increased by €200 million (about US$240 million) for 2021. (Art. 24.1.) In addition, for fiscal year 2021, the legislation grants Alitalia–Societa’ Aerea Italiana S.p.A.—which is under extraordinary administration—and its subsidiary companies a loan of up to €100 million (about US$119 million) for a six-month period to guarantee operational and managerial continuity. (Art. 24.2.)

Fund to Support Closed Economic Activities

The legislation establishes a new fund in the amount of €100 million (about US$119 million) for fiscal year 2021 to aid economic activities that had to close for at least four months due to governmental measures adopted between March 25, 2020, and the date of the new law because of the pandemic. (Art. 1.1.)

Tax Credits

D.L. No. 73 extends a tax credit for business tenants in nonresidential properties whose income was lower than €15 million (about US$18 million) during the second tax period before the new law entered into force. (Art. 4.2.) It also extends a reduction in nonresidential electric utility charges. (Art. 5.1.) 

Measures to Support Tourism Sector and Economic and Commercial Activities in Art Cities and Subsidized Hotels

The law approves the spending of €50 million (about US$59 million) in 2021 for the support of municipalities that are defined as possessing a cultural, historic, artistic, or landscape value and whose territories contain UNESCO-designated world heritage sites. (Arts. 7.1, 7.4.) 

Benefits for Textile and Fashion Sectors

The legislation makes grants available from a fund created to aid the textile and fashion sectors. The grants also are available to theme parks, aquariums, geological parks, and zoos. (Arts. 8.1(c), 8.2.) 

Sports Sector

D.L. No. 73 allocates €56 million (about US$66 million) to support sports activities affected by restrictive measures established after October 24, 2020, to tackle the pandemic. (Art. 10.3.) The Single Fund to Support Sports Associations and Amateur Sports Clubs created in 2020 is increased by €180 million (about US$214 million) for 2021. (Art. 10.5.) 

Covid-19-Related Health Measures

To ensure homogeneous health care throughout Italy for persons who have had a COVID-19-related clinical episode, medical help based on the severity of the symptoms presented, and early diagnosis of possible long-term effects of the disease, the National Health Service will guarantee outpatient specialist services, free of charge, for a period of two years starting from the date that the new legislation enters into force. (Art. 27.1.)

Research and Development of Vaccinations and Medications

D.L. No. 73 establishes a tax credit for companies performing research and development of vaccinations and drugs, including for all the essential costs of these activities, such as industrial research, experimental development, and feasibility studies. (Art. 31.1–.2.)

Territorial and Hospital Child and Adolescent Neuropsychiatry Services and Extraordinary Recruitment of Psychologists

The legislation directs an additional amount of €8 million (about US$9.5 million) during 2021 to strengthening territorial and hospital services for child and adolescent neuropsychiatry and increasing the recruitment of psychologists in response to the health needs connected with the pandemic. (Art. 33.1.)

Fund for Wage Supplement

Employers who have experienced a 50% drop in income during the first semester of 2021 compared with the first half of 2019 because of the pandemic may apply to an extraordinary wage supplement fund. Supplements are available for a maximum duration of 26 weeks in the period between the date the new law enters into force and December 31, 2021. In such cases, the average hourly reduction cannot exceed 80% of the daily, weekly, or monthly working hours of workers covered by a collective bargaining agreement. (Art. 40.1.)

Reemployment Contracts

Between July 1, 2021, and October 31, 2021, the law establishes reemployment contracts as employment contracts for an indefinite period aimed at encouraging the inclusion of unemployed workers in the labor market in the recovery period of the pandemic. (Art. 41.1.) The projects supporting reemployment contracts must have a duration of six months, during which the penalties provided by current legislation for unlawful dismissal apply. (Art. 41.2.)

Expansion of Compensation for Seasonal, Tourism, and Entertainment Workers

Seasonal, tourism, and entertainment workers who benefited from the extraordinary compensation established by Decree Law No. 41 of March 22, 2021, will receive a one-time additional indemnification of €1,600 (about US$1,900). (Art. 42.1–.3)

Measures Concerning Local Public Transportation

D.L. No. 73 increases a special fund benefiting local public transportation throughout the country by an additional €450 million (about US$534 million) for 2021. (Art. 51.1.)

Educational Sector Measures

The legislation authorizes the Ministry of Instruction to adopt measures regarding the administration of the national educational system, including those related to the beginning of the school year for the 2021–22 period, which take into consideration the needs of students who suffer severe or immunosuppressive diseases. (Art. 58.1(a) and (d).)

Italian Science Fund

The law creates a new fund for the Ministry of Universities and Research, called the “Italian Fund for Science,” with an endowment of €50 million (about US$59 million) for 2021 and €150 million (about US$178 million) starting in 2022. (Art. 61.1.)

Additional Measures

Additional measures approved under the new legislation to counteract the negative effects of the COVID-19 pandemic include:

  • Support for agriculture, fishing, aquaculture, and the agritourism sector. (Art. 68.1.)
  • Compensation for workers in the agricultural and fisheries sector. (Art. 69.1.)
  • Exemption from social security and welfare contributions for agricultural chains (filiere agricole) belonging to the agritourism and wine-growing sectors. (Art. 70.1.)
  • Increased support for an aviation sector fund. (Art. 73.1.)

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