There is also money to extend short-term layoff schemes, to support families, to help the underdeveloped south and to make it cheaper to hire workers under 35 years of age.
As daily cases in Italy hit a new record 11,705 on Sunday, Conte said the situation had become critical but his government has been determined to avoid a repeat of the lockdown imposed at the start of the crisis in March.
Among several measures, the government has set up a 4 billion euro fund to compensate companies worst hit by coronavirus lockdowns and extended until January a moratorium on repayments for loans to small and medium-sized businesses.
The ruling coalition, led by the anti-establishment 5-Star Movement and centre-left PD party, agreed a preliminary version of the stimulus package, a government source said, leaving final details to be hammered out.
Italian Prime Minister Giuseppe Conte gave mayors the power to shut public squares from 9 p.m.to halt gatherings as he unveiled a further package of measures on Sunday to try to halt a sharp rise in COVID-19 cases.
Italy's budget deficit now equates to 10.8% of gross domestic product (GDP).
The expansionary package is expected to keep Italy's deficit next year to 7% of economic output, up from a 5.7% forecast in April, reflecting the additional spending.
Italy has forecast economic growth of 6% in 2021.
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