Italy seeks 28.5 billion euros in EU's SURE unemployment aid

MILAN (Reuters) - Italy has asked the European Union to tap its SURE unemployment scheme for 28.5 billion euros ($33.6 billion) after extending furlough support to help the economy withstand the hit from the COVID-19 crisis.

The Italian government on Friday approved a new stimulus package worth 25 billion euros, setting aside roughly half of that sum to support employment.

Italy extended temporary layoff schemes for up to 18 weeks, setting conditions and requiring firms not to cut jobs to qualify for state aid.

Economy Minister Roberto Gualtieri and Labour Minister Nunzia Catalfo said in a joint statement on Saturday they had written to the EU Commission asking to tap the SURE scheme.

"Italy's economy has suffered greatly due to lockdown measures introduced since late February, which have proven very effective in stemming contagion but had a strong negative impact on the economy and the social system," the two ministers said.

To confront the healthcare emergency, which has led to more than 35,000 victims in the country, Italy has adopted measures that are set to widen the budget deficit by 100 billion euros this year, pushing it to 11.9% of national output, up from 1.6% in 2019.

The EU plans to borrow nearly 100 billion euros starting in September to fund the SURE unemployment scheme.

(Reporting by Giuseppe Fonte, writing by Valentina Za; Editing by Christina Fincher)