Italy set to double baby bonus to fight birth rate 'apocalypse'

Italy's health minister is proposing doubling a 'baby bonus' incentive for couples to have more children to combat what she calls a catastrophic decline in the country's birth rate.

"If we carry on as we are and fail to reverse the trend, there will be fewer than 350,000 births a year in 10 years' time, 40 percent less than in 2010 -- an apocalypse," the minister, Beatrice Lorenzin, said in an interview published Sunday by daily La Repubblica.

Lorenzin told the paper she wanted to double the standard baby bonus, currently 80 euros ($90) a month for low-to-middle income families, and introduce higher payments for second and subsequent children to encourage bigger families.

Introduced last year, the allowances are currently payable only for babies born between January 1, 2015 and December 31, 2017 up to their third birthdays.

Lorenzin wants to expand eligibility to all under-threes (thereby including those born before 2015) and to extend the provision for an additional three years, covering all babies born up until the end of 2020.

Higher-income families, those with taxable earnings of more than 25,000 euros per year, are not eligible for the scheme, excluding about a third of parents.

The allowances are paid at higher rates for the poorest -- those declaring less than 7,000 euros a year to the taxman.

Under the new proposals, the payment for second and subsequent children would be 240 euros/month for average families and 400 euros/month for the poorest.

Lorenzin is an influential member of Prime Minister Matteo Renzi's centre-left government and would not have floated the increased payments without a green light from him, political commentators noted.

The proposals may however raise eyebrows in Brussels, where the European Commission is pressing Renzi to move faster on cutting the country's budget deficit as a way of bringing down its huge national debt, currently equivalent to more than 130 percent of GDP.

Lorenzin's proposals would add 2.2 billion euros to public spending over six years, her department estimates.

"In five years we have lost more than 66,000 births (per year) - that is the equivalent of a city the size of Siena," the minister said. "If we link this to the increasing number of old and chronically ill people, we have a picture of a moribund country."

Lorenzin said the drive to get Italians to have more children would not be restricted to fiscal incentives.

"Couples have to understand that waiting until after 35 to have children can be a problem," she said.