Italy approves 2.9 billion euros aid package after new virus curbs

MILAN (Reuters) - Italy has approved a new aid package to cushion the blow to the economy from restrictions it introduced earlier this week in an effort to stem a resurgence of the COVID-19 pandemic.

The measures agreed by cabinet overnight are worth 2.9 billion euros (2.6 billion pounds), a person with knowledge of the matter said.

Coronavirus curbs which came into force on Friday divide the country into three zones according to the severity of the latest outbreak.

The limitations are less severe than the nationwide lockdown Rome imposed when the coronavirus first took hold in March, but many shops have been shut in the highest-risk zones such as Milan's Lombardy region, where people can only leave their homes for work, health reasons or emergencies.

The package delays to the spring tax payments due in November and increases transfers to businesses operating in regions classed as "red" or "orange" which have been hit by the strictest limitations.

"We have increased compensations because we realised that what was granted for the spring lockdown wasn't enough," Prime Minister Giuseppe Conte told Corriere della Sera daily in an interview. "We've also widened the number of beneficiaries."

The package provides funds for childcare or work leave for parents who are not able to work from home, after the government moved classes online for high schools and the last two years of middle school.

Conte said funds had also been set aside for regions that could turn into high-risk zones under the current system, which has been attacked by some politicians in the worst-hit areas.

"There's no turning back. The alternative is to shut down the entire country causing enormous damage. It would not be a case of 'a sorrow shared is a sorrow halved', just disaster for everyone," Conte said.

(Reporting by Valentina Za and Giuseppe Fonte; Editing by Jason Neely and David Holmes)