How are Italy’s business leaders coping with the coronavirus? 

Not so well, is the short answer. Every business except for supermarkets and pharmacies is suffering, and chief executives are fearful that neither the government nor the rest of Europe are doing enough.
 
Italy’s economy is in free fall, the country has a mortality rate above 10%, the national lockdown has brought a virtual halt to all but essential activity, and the government’s initial aid package for families and companies - just €25 billion - is insufficient to staunch the economic bloodbath. Worse still, the highly indebted country is having a much harder time pledging a big ticket rescue package than other places such as the United States, UK or Germany.
 
The Confindustria national association of employers has been at loggerheads with the government, trying to keep some sectors going. The all-important tourism sector is dead in the water. The textile/fashion sector, second only to tourism, has seen a collapse in orders. And the supply chain shock of imported components has combined with the recessionary demand shock to produce what is clearly a deep recession.
 
On a positive note, what is most striking is the way a number of Italian companies are retooling rapidly to produce much needed masks and gloves and disinfectants and ventilators. Italy’s so-called third sector of non-profit voluntary associations has performed admirably in helping the poor, while crowd-funding initiatives have raised millions to help buy hospital equipment for the hardest hit places in Lombardy and elsewhere.
 
Giorgio Armani has not only made multimillion euro donations but he has retooled his legendary fashion house to make personal protective clothing for doctors and nurses. He is not alone. This is the way business leaders can both protect their reputations and actually do some good. In fact, the solidarity, the humanity, the empathy that I have seen amid the desolation is positively heartwarming.
 
Perhaps the most generous actions I would like to cite are coming from Banca Intesa San Paolo, which is Italy’s biggest banking group. The bank made a €100 million euros donation toward vaccine and medical research; then it pledged €15 billion euros, a staggering amount, in virtually zero interest rate loans to help struggling companies that are facing liquidity shocks or the risk of closure. This is real money, and it matters, and Intesa’s chief executive, Carlo Messina, deserves a big round of applause for his courage and generosity.
 
When the worst is finally over - and let’s remember that Italy’s coronavirus curve is weeks ahead of the UK or US trajectories - there may well be some permanent structural damage to the industrial base of the country, as occurred after the financial crisis of more than a decade ago. Ditto regarding employment levels. But the government is committed to second and third rounds of financial aid, and if that means deficit borrowing and a higher debt level, so be it. 

The old Maastricht deficit rules have been suspended by the European Commission, the European Central Bank - after a bad stumble by Christine Lagarde at the start - has now pledged unlimited quantitative easing. And as Mario Draghi put it so articulately in his Financial Times article a few days ago, this is a disaster of potentially biblical proportions, the equivalent of war, and the world will have to get used to living with a permanently higher level of indebtedness. 

Essentially Italy’s solution, and that of much of Europe, will have to lie in monetising the debt, come what may. This is the only way that Italian industry will survive, and the same may be true elsewhere.
 
The lessons for Boris Johnson’s Britain should be clear for all to see.