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Italy’s economic engine ground nearly to a halt on Monday amid Europe’s largest coronavirus outbreak.
Milan, the country’s financial hub, and the productive regions of Lombardy and Veneto were in virtual lockdown, as schools, universities and museums were closed, sporting events were canceled and a curfew was imposed on bars.
The country is struggling to contain the spread of the virus, with more than 200 cases to date, despite sweeping measures put in place by the government limiting travel to and from affected areas.
Adding to the concern: contagion seems to spreading mostly through hospitals and it remains unclear exactly how the illness arrived in the country and who the initial spreader, or spreaders, were.
The hit to the economy from limiting movement and activity in the prosperous area from Venice to Milan, home to some 15 million people and responsible for almost a third of Italy’s gross domestic product, is likely to be severe. All the more so as the country was already headed for a recession.
There were also signs of panic taking hold. Shoppers stormed supermarkets in Milan over the weekend as citizens worried that food stocks would run out. Staples like meat, bread and pasta were in short supply in some stores as consumers, many wearing surgical masks, waited in long lines to stock up.
Milan’s usually bustling streets were nearly deserted on Monday, with few pedestrians venturing outside and typically crowded cafes mostly empty. Companies including UniCredit SpA, Italy’s biggest, encouraged employees to work from home.
For the 50,000 people in the municipalities south of Milan, where the lion’s share of cases have been identified, measures are even stricter. All work activity has come to a halt with blockades preventing travel in and out of the area.
The tally of confirmed cases continued to rise Monday morning, with Lombardy Governor Attilio Fontana saying on Rai radio that the number of infected people in his region now totals 165.
The health ministry in Rome was set to release new official numbers at noon on Monday. Four people have died in the country as a consequence of the virus, including an 84-year-old man at a hospital in the city of Bergamo. The spread of the virus inside hospitals in the north is a main cause of concern for health officials.
Italian stocks and bonds tumbled on concern that the spread of the coronavirus may push the economy into a recession. The yield on 10-year bonds jumped the most this year while the FTSE MIB Index extended decline to as much as 4.8%, the most intraday since June 2016.
Analysts at Mediobanca SpA called the virus spread effect a short-term macro headwind that could affect economic recovery as it impacts the most productive regions. “The news flow is certainly worrying and, if it is not resolved quickly, it is likely to have a burden on economic activity,” the investment bank said.
Matteo Salvini, leader of the League party, used the outbreak to attack Prime Minister Giuseppe Conte for not defending Italy’s borders. Italy needs “to make our borders armor-plated,” he said, calling on Conte to resign “if he isn’t able to defend Italy and Italians.”
The rise in infections comes at a bad moment for Conte’s administration, already under fire for failing to mount a coherent response to the spread of the virus. As Conte chairs a series of marathon meetings in Rome to counter the spread of the disease, his plan for tax reforms and investments to restart an ailing economy has stalled.
Efforts to contain the coronavirus could have been initially thwarted by difficulty in identifying the roots of the spread.
Most of Italy’s cases were initially linked to a 38-year-old man who sought treatment at a hospital in the Lombardy region on Feb. 18. While there, he infected dozens of patients and medical staff, who then spread it further afield. Tracking efforts initially focused on a friend of the man, a businessman who had returned from China, but tests proved negative and the origin of the contagion remains a mystery.
— With assistance by Marco Bertacche, Chiara Remondini, Sonia Sirletti, and Karl Maier
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