* Extra spending to fund furlough schemes, grants for businesses * Draft decree includes 2.8 billion euros for vaccine roll-out * Draghi promises new stimulus in April, shunting up 2021 deficit ROME, March 19 (Reuters) - Mario Draghi’s Italian government will detail some 32 billion euros ($38.05 billion) of stimulus measures on Friday to support the battered economy, funding furlough schemes and grants to businesses forced to close by coronavirus lockdowns. The extra spending, which also includes fresh financing for the health service, was already budgeted for by the previous government led by Giuseppe Conte that collapsed in January. The financial help arrives as Italian hospitals grapple with a surge in coronavirus infections and fatalities. Draghi will also extend until the end of June a freeze on firing which was due to expire on March 31, according to a draft decree seen by Reuters, to be approved by the cabinet on Friday. The firing ban was introduced last year to prevent a surge in unemployment while companies and shops were shuttered to stem the COVID-19 outbreak. Part of the 32-billion euros will be used to extend extraordinary temporary layoff schemes for up to 28 weeks between April and December. Firms will qualify for this support only if they do not cut jobs, according to the draft. Including the latest measures, Italy has approved almost 200 billion euros of extra spending since the COVID pandemic hit the country almost 13 months ago. With most of the country under strict lockdown restrictions, Draghi has promised more stimulus in April, which a Treasury official said would push the budget deficit close to 10% of gross domestic product, up from 9.5% last year. The hike in the deficit will also increase Rome’s huge public debt, the second highest in the euro zone after that of Greece and equal to 155.6% at the end of last year. The economy shrank 8.9% in 2020, Italy’s steepest post-war recession. It is officially forecast to rebound by 6% this year, but Draghi is expected to cut that goal significantly when Rome issues new economic forecasts next month. Of the 32 billion euros due to be approved by cabinet on Friday, just over 11 billion will fund grants to companies. Some 2.8 billion euros will go to the health service, mainly to try to accelerate Italy’s sluggish vaccine roll-out. The most contentious measure, still to be finalised, is an amnesty on tax arrears for sums of up to 5,000 euros which the authorities claimed for the period prior to 2015. This could cost state coffers some 2 billion euros.
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