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Italy to extend ban on firing workers in sectors worst hit by virus - sources

FILE PHOTO: Workers wearing protective face masks are seen at the NTN-ICSA factory that produces metal bearings for cars, planes and buses, following the outbreak of the coronavirus disease (COVID-19), San Benigno Canavese, Italy, May 4, 2020. REUTERS/Massimo Pinca

ROME (Reuters) - Italy is set to extend a ban on firings beyond its current deadline of end-June for workers employed in some industrial sectors worst hit by the coronavirus crisis, three government and political sources told Reuters on Thursday.

Under pressure from unions and centre-left parties, Prime Minister Mario Draghi’s national unity administration will approve next week a decree to extend the ban for some sectors, including textiles, until October, the sources said.

The ban on firings currently runs until June 30 for medium-sized and large businesses benefiting from the pandemic-related furlough schemes, while for small firms it is due to expire in October.

The decree will also fund expansionary measures worth 2.1 billion euros ($2.51 billion) through savings expected from previous stimulus packages approved earlier this year, the sources added.

Draghi told parliament on Wednesday that Italy still needs an expansionary fiscal policy to achieve long-lasting growth after the COVID-19 pandemic.

The government aims to suspend claims on outstanding tax payments until the end of August, one of the sources said, to lighten the fiscal burden amid efforts to relaunch Italy’s ravaged economy.

Some 680 million euros will strengthen an existing scheme that helps companies access financing to purchase new equipment.

($1 = 0.8382 euros)

Reporting by Giuseppe Fonte and Angelo Amante; Editing by Jan Harvey