The coronavirus pandemic has taken its toll on all of Europe’s economies, causing the closure of businesses, rising unemployment rates and spiralling debts.

One of the worst-affected countries is Italy.

In an attempt to cushion the financial impact of a months-long lockdown, nearly 50,000 deaths and more than a million infections, the cabinet has approved an economic stimulus plan for next year.

The 2021 fiscal plan is described by local media as a “maxi budget” due to its size – it contains 248 measures and is worth more than €38 billion.

This figure may yet increase, as the plan is likely to be revised in the coming weeks after already facing long delays.

Extra spending will go towards healthcare.

€400 million have been allocated to buy vaccines and drugs to treat patients with COVID-19 and €70 million will be used to buy rapid tests.

Measures to support struggling businesses and to save thousands of jobs are at the centre of Italy’s fiscal plan.

€5.3 billion will be allocated to fund furlough schemes as well as a two-month extension to a ban on dismissals which was due to expire in January.

In line with the new approach to public spending, the budget plan also includes tax breaks aimed at getting more women back to work and encouraging youth employment.

But as Italy is the country that is set to receive the largest share of the European Union’s recovery fund, a part of these resources will be used to tackle some of the long-standing issues widely seen as holding back the nation and its sluggish economy.

€15 billion euros worth of grants from the EU will be invested mainly in green policies and to make the country more digital and innovative.

Prime Minister Giuseppe Conte described the funding as a way to build a better Italy, although the allocation of resources will very much depend on how capable national governments are at outlining how they actually intend to spend the funds.