US LGBT activist Justin Nelson says country risks alienating investors if it fails to pass law allowing civil unions for same-sex couples

An American LGBT rights advocate has warned that Italy will face deep economic repercussions if it fails to legalise civil unions for same-sex couples, including reluctance by multinational companies to invest in the country.

On Thursday the Italian senate is due to begin debating proposed legislation that would recognise civil unions for same-sex couples. But it is far from clear whether the government of Matteo Renzi, the left-of-centre prime minister who supports the bill, has garnered enough support for it to pass.

Italy is the only country in western Europe that does not recognise civil unions or gay marriage.

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“I think the eyes of the world, especially the LGBT world, are squarely on Italy now,” said Justin Nelson, co-founder of the US-based National Gay & Lesbian Chamber of Commerce (NGLCC). “It is not only a question of tourists [boycotting Italy] if it fails but a business question. For a country with a growing economy to have such a glaring omission will undoubtedly have negative economic impacts.”

For months, it looked like the long-awaited proposal would pass in the Italian parliament because public opinion supports the legal rights associated with civil unions. But a proposal in the bill that would allow a person in a same-sex relationship to adopt their partner’s child has created controversy, with conservative members of Renzi’s Democratic party vowing to vote against it.

The interior minister, Angelino Alfano, a member of the New Centre-Right party, is one of the most vocal critics of the so-called “step-child provision”. This week, Alfano suggested he would seek to overturn the legislation if it passed by calling for a referendum on the measure.

It has not yet been announced when the vote in the upper chamber will take place, though it is likely to be next week. Opposition to the legislation is being led by Catholic organisations, who are expected to stage a “family day” protest on Saturday.

According to Italian media reports, the Renzi government is waiting to see how many people join that protest before deciding whether or not to scrap the provision in the final hour.

The NGLCC, which is based in Washington but is opening chapters of its organisation around the world, seeks to use economic pressure from LGBT entrepreneurs and others to extend equal rights to that community.

On a recent trip to Italy, where a new chapter is due to open this year, Nelson focused much attention on how rights for the LGBT community were regressing in Venice, where a newly elected mayor, Luigi Brugnaro, has made homophobic remarks. Last year Brugnaro also removed 50 books about same-sex families from city classrooms.

Nelson said he met tourism officials in Venice in October to point out that LGBT Americans have more disposable income and travel three times more than their heterosexual counterparts. Italy – and especially Venice – has traditionally been considered a favourite destination of LGBT Americans, but he pointed out that this could change.

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“Banning books, making inflammatory comments about children, abandoning pride parades – it is right out of the losing playbook here in America,” Nelson said.

Asked whether he would advocate a boycott of the city, he said: “I’m always hesitant about a boycott. I prefer the word ‘educate’. I have no problem whatsoever using our megaphone to share what cities and what countries are doing what for LGBT inclusion and who is progressing and who is regressing, and we will let travellers make their own determinations.”

While Nelson said he did not seek out a meeting with Brugnaro, he said his economic argument for equal rights and inclusion sometimes reached people in ways that “crying out in the town square” did not.

“The message was simple: the mayor and his policies of homophobia and his anti-gay propaganda is putting at risk significant tourism dollars and the reputation of the city,” he said.

A spokesman for the mayor’s office did not return a request for comment.