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Italy just locked down the world's 8th biggest economy. A deep recession looms – CNN

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The measures announced late Monday include travel restrictions on 60 million residents, a ban on public events, the closure of schools, movie theaters, museums and gyms, and limits on opening hours for restaurants, bars and shops.
The government took action as the number of deaths caused by coronavirus reached 463 and infections topped 9,000, more than double the number reported in China as a share of the population. The restrictions are in place until at least April 3.
Taken together, the unprecedented measures are likely to push an economy that contracted in the final three months of 2019 into a sharper downturn that will put Italian hotels, travel companies and restaurants under intense pressure.
A 'short, sharp' global recession is starting to look inevitable
Jack Allen-Reynolds, senior Europe economist at Capital Economics, said Italy’s economy will contract sharply in the first half of the year even if the restrictions are lifted at the end of April, with GDP declining about 2% for all of 2020.
The hit to GDP will be “much bigger” if the restrictions are extended until the end of June, he added.
“This does not take account of the impact on the banking sector … the spillovers from the impact of the virus on other parts of the eurozone, or the potential supply-chain disruption if the virus really takes off in Germany and other key trade partners,” he added.
Economists at Goldman Sachs expect the restrictions to shave 1.5 percentage points off Italian economic growth in both the first and second quarters of the year, followed by a pickup during the second half.
“Although fiscal policy will limit some of this drag, the virus outbreak is very likely to push Italy into recession,” they said in a research note on Monday.
The sectors most affected by the lockdown -— including transport, art and entertainment, retail, and hotels and restaurants — account for around 23% of Italian GDP, according to Goldman Sachs.

Businesses respond

Major Italian companies are working to comply with the new limits.
Fiat Chrysler (FCAU) said it is “taking action” in all areas of its Italian operations to maintain business continuity. This includes screening visitors to its facilities, suspending nonessential travel, facilitating remote working and minimizing interpersonal contact.
“Currently, the group’s Italian plants and key functions are continuing to operate as planned,” it said in a statement.
Supermarket chain Esselunga said it is implementing social distancing in stores, in accordance with government rules requiring that shoppers and restaurant patrons remain at least three feet apart.
Containment efforts are likely to plunge the restaurant and tourism sectors into crisis, said Stefano Manzocchi, chief economist at Italian trade association Confindustria. The manufacturing sector could also be harmed because foreign tourists drive demand for “Made in Italy” goods, he added.
A waiter sets a table in a restaurant on an empty street in Venice, Italy. A waiter sets a table in a restaurant on an empty street in Venice, Italy.
“Limitations in movements and the [fear] about what is going to happen are likely to bring about a contraction in consumption, which is probably already strongly underway,” said Manzocchi.
Italy’s tourism sector, which accounts for 6% of GDP, will be particularly hard hit, as popular destinations in Venice and Rome are deserted. On Tuesday, the Vatican closed Saint Peter’s Square and Saint Peter’s Basilica to tourists.

Government intervention

Italy’s government is expected to unveil a range of emergency measures to offset some of the economic shock caused by the lockdown.
The country’s economic ministry said Tuesday that mortgage payments would be suspended, for example. The measure is being implemented in collaboration with banks, said a spokesperson for the ministry.
Italy’s central bank said it is working closely with the government “to define appropriate measures aimed at supporting firms hit by the economic fallout of the outbreak.”
Manzocchi expects to see wider suspensions in debt repayments, liquidity support for Italian companies, subsidies for temporarily unemployed workers and, eventually, a public infrastructure investment plan.
“Given the scale of the disruption that all of this will cause, we suspect that the government will eventually provide fiscal support worth several percent of GDP,” Allen-Reynolds of Capital Economics said.
“This wouldn’t do much to raise aggregate demand while the quarantine is in place, but it would help to maintain spending on essential items, prevent borrowers from defaulting on their loans, and provide a grace period for some tax payments,” he added.
But these measures will only partially offset the hit to the economy and will not be enough to counter the blow to tourism, much of which is not recoverable as carnivals, trade fairs and events are canceled, said Paolo Pizzoli, senior economist at Dutch bank, ING.
Italy’s stock market reflected the pessimism, plunging further into a bear market on Tuesday. The benchmark FTSE MIB index has now fallen by nearly 30% since February 19.

Europe to suffer, too

The country’s containment measures are expected to ripple throughout Europe, as the movement of Italian travelers is curbed and manufacturing potentially disrupted.
The region was already smarting from China’s coronavirus shutdown, which hit demand for European goods and disrupted manufacturing supply chains. Measures taken by other European governments to contain the spread of the virus, such as cancellations of public gatherings and sporting events, are expected to dent growth further.
Researchers at Barclays expect the euro area to experience a “short-lived but relatively deep recession” in the first half of this year. They expect growth for the full year to come in at 0.3%, versus the 1% rate expected before the start of the outbreak in China.
The northern part of Italy, where the coronavirus outbreak is worst, accounts for roughly 75% of the country’s trade with other EU countries, according to Goldman Sachs. The supply chains of Italian and German automakers are especially well integrated.
“This is going to be a European problem,” Manzocchi said.
— Eoin McSweeney, Valentina Di Donato and Emma Reynolds contributed reporting.

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Construction wraps on indoor supervised site for people who inhale drugs in Vancouver

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VANCOUVER – Supervised injection sites are saving the lives of drug users everyday, but the same support is not being offered to people who inhale illicit drugs, the head of the BC Centre for Excellence in HIV/AIDS says.

Dr. Julio Montaner said the construction of Vancouver’s first indoor supervised site for people who inhale drugs comes as the percentage of people who die from smoking drugs continues to climb.

The location in the Downtown Eastside at the Hope to Health Research and Innovation Centre was unveiled Wednesday after construction was complete, and Montaner said people could start using the specialized rooms in a matter of weeks after final approvals from the city and federal government.

“If we don’t create mechanisms for these individuals to be able to use safely and engage with the medical system, and generate points of entry into the medical system, we will never be able to solve the problem,” he said.

“Now, I’m not here to tell you that we will fix it tomorrow, but denying it or ignoring it, or throw it under the bus, or under the carpet is no way to fix it, so we need to take proactive action.”

Nearly two-thirds of overdose deaths in British Columbia in 2023 came after smoking illicit drugs, yet only 40 per cent of supervised consumption sites in the province offer a safe place to smoke, often outdoors, in a tent.

The centre has been running a supervised injection site for years which sees more than a thousand people monthly and last month resuscitated five people who were overdosing.

The new facilities offer indoor, individual, negative-pressure rooms that allow fresh air to circulate and can clear out smoke in 30 to 60 seconds while users are monitored by trained nurses.

Advocates calling for more supervised inhalation sites have previously said the rules for setting up sites are overly complicated at a time when the province is facing an overdose crisis.

More than 15,000 people have died of overdoses since the public health emergency was declared in B.C. in April 2016.

Kate Salters, a senior researcher at the centre, said they worked with mechanical and chemical engineers to make sure the site is up to code and abidies by the highest standard of occupational health and safety.

“This is just another tool in our tool box to make sure that we’re offering life-saving services to those who are using drugs,” she said.

Montaner acknowledged the process to get the site up and running took “an inordinate amount of time,” but said the centre worked hard to follow all regulations.

“We feel that doing this right, with appropriate scientific background, in a medically supervised environment, etc, etc, allows us to derive the data that ultimately will be sufficiently convincing for not just our leaders, but also the leaders across the country and across the world, to embrace the strategies that we are trying to develop.” he said.

Montaner said building the facility was possible thanks to a single $4-million donation from a longtime supporter.

Construction finished with less than a week before the launch of the next provincial election campaign and within a year of the next federal election.

Montaner said he is concerned about “some of the things that have been said publicly by some of the political leaders in the province and in the country.”

“We want to bring awareness to the people that this is a serious undertaking. This is a very massive investment, and we need to protect it for the benefit of people who are unfortunately drug dependent.” he said.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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N.B. election: Parties’ answers on treaty rights, taxes, Indigenous participation

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FREDERICTON – The six chiefs of the Wolastoqey Nation in New Brunswick distributed a survey on Indigenous issues to political parties ahead of the provincial election, which is scheduled to kick off Thursday. Here are some of the answers from the Progressive Conservative, Liberal and Green parties.

Q: How does your party plan to demonstrate a renewed commitment to recognizing our joint treaty responsibilities and acknowledging that the lands and waters of this territory remain unceded?

Progressive Conservative: The party respectfully disagrees with the assertion that land title has been unceded. This is a legal question that has not been determined by the courts.

Liberal: When we form government, the first conversations the premier-designate will have is with First Nations leaders. We will publicly and explicitly acknowledge your treaty rights, and our joint responsibility as treaty people.

Green: The Green Party acknowledges that New Brunswick is situated on the unceded and unsurrendered territories of the Wolastoqiyik, Mi’kmaq and Peskotomuhkati peoples, covered by the Treaties of Peace and Friendship. Our party is committed to establishing true nation-to-nation relationships with First Nations, grounded in mutual respect and co-operation as the treaties intended.

Q: How does your party propose to approach the issue of provincial tax agreements with First Nations?

Progressive Conservative: The government of New Brunswick operates in a balanced and fair manner with all organizations, institutions and local governments that represent the citizens of this province, including First Nations. Therefore, we cannot offer tax agreements that do not demonstrate a benefit to all citizens.

Liberal: Recent discussions with First Nations chiefs shed light on the gaps that existed in the previous provincial tax agreements with First Nations. Our party is committed to negotiating and establishing new tax agreements with First Nations that address the local needs and priorities and ensure all parties have a fair deal.

Green: The Green Party is committed to fostering a respectful relationship with First Nations in New Brunswick and strongly opposes Premier Blaine Higgs’s decision to end tax-sharing agreements. We believe reinstating these agreements is crucial for supporting the economic development and job creation in First Nation communities.

Q: How will your party ensure more meaningful participation of Indigenous communities in provincial land use and resource management decision-making?

Progressive Conservative: The government of New Brunswick has invested significant resources in developing a robust duty to consult and engagement process. We are interested in fully involving First Nations in the development of natural resources, including natural gas development. We believe that the development of natural gas is better for the environment — because it allows for the shutdown of coal-fired power plants all over the globe — and it allows for a meaningful step along the path to reconciliation.

Liberal: Our party is focused on building strong relations with First Nations and their representatives based on mutual respect and a nation-to-nation relationship, with a shared understanding of treaty obligations and a recognition of your rights. This includes having First Nations at the table and engaged on all files, including land-use and resource management.

Green: We will develop a new Crown lands management framework with First Nations, focusing on shared management that respects the Peace and Friendship Treaties. We will enhance consultation by developing parameters for meaningful consultation with First Nations that will include a dispute resolution mechanism, so the courts become the last resort, not the default in the face of disagreements.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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Canadian Coast Guard crew member lost at sea off Newfoundland

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ST. JOHN’S, N.L. – A crew member of a Canadian Coast Guard ship has been lost at sea off southern Newfoundland.

The agency said in a release Wednesday that an extensive search and rescue effort for the man was ended Tuesday evening.

He was reported missing on Monday morning when the CCGS Vincent Massey arrived in St. John’s, N.L.

The coast guard says there was an “immediate” search on the vessel for the crew member and when he wasn’t located the sea and air search began.

Wednesday’s announcement said the agency was “devastated to confirm” the crew member had been lost at sea, adding that decisions to end searches are “never taken lightly.”

The coast guard says the employee was last seen on board Sunday evening as the vessel sailed along the northeast coast of Newfoundland.

Spokeswoman Kariane Charron says no other details are being provided at this time and that the RCMP will be investigating the matter as a missing person case.

This report by The Canadian Press was first published Sept. 18, 2024.

The Canadian Press. All rights reserved.

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