ROME (AFP) - The Italian government said Friday (Jan 15) it wants to run a higher budget deficit in 2021 to fund new aid for businesses struck by coronavirus restrictions.

In a statement issued overnight after a Cabinet meeting, it said it would seek to borrow an extra €32 billion (S$51.6 billion).

The money will be used to offer "further help" to businesses and citizens "worst hit by the effects of the Covid-19 pandemic", the government said.

Last year, Italy increased its public debt by more than €100 billion to fund furlough schemes and other economic relief measures.

Parliament would have to approve the new debt request but this is seen as a formality, despite the political crisis threatening the government's survival.

Former premier Matteo Renzi, who this week pulled out of the ruling coalition, said his Italia Viva party would back any proposal to help virus-hit businesses.

Italy was the first country in Europe to have been overwhelmed by the pandemic.

To date, it has suffered nearly 81,000 virus deaths and its economy has plunged into a deep recession.

Health Minister Roberto Speranza was, meanwhile, expected to announce tighter regional coronavirus rules due to a worsening situation, valid from Saturday.

"The situation cannot be underestimated. Let's work together in a timely manner to anticipate the restrictions to avoid a new strong wave," the minister told regional leaders on Thursday.

According to the Corriere della Sera newspaper, Lombardy, Emilia-Romagna and Calabria risk being reclassified as "red zone" regions, subject to a partial lockdown.