Italy's Monti seeks key labour reforms

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Italy's Monti seeks key labour reforms

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Targeting Italy’s red tape wrapped and inefficient labour market, technocrat Prime Minister Mario Monti met top trade union leaders on Tuesday.

As part of his attempts to revive Italy’s chronically uncompetitive economy Monti’s is hoping to reach a reform deal with the unions, but even if they do not agree he has pledged to push through changes swiftly.

Out would go Article 18 of Italy’s labour law, which makes it very difficult to fire workers in companies with more than 15 employees for all but the grossest of misconduct.

It is part of legal protection for employees that dates back to the 1970s era of trade union power.

A priority is jobs for the young as nearly a third of under-24-year-olds unemployed.

For the first time all Italians would be covered by an unemployment benefits plan.

Angelino Alfano, who now leads former PM Silvio Berlusconi’s party, said: “It’s a unique opportunity to reform Italy’s labour market. We need this as the labour market is central to the country’s competitiveness.”

Officially only about 57 percent of Italians have a job. That is partly because fewer woman work but the figures also hide a huge underground — and therefore untaxed — economy.

As well as one of the lowest employment rates in the euro zone Italy also has some of the slowest growth in Europe.

Failure to get union backing for reforms will likely lead to strikes and dissent within the grand coalition of parties supporting Monti in parliament.

The three main confederations, which represent a substantial part of Italy’s 12 million-strong union membership, are divided. The CGIL, the largest group, is taking a harder line than the more moderate CSIL and UIL.

A deal on labour reforms will determine whether Monti can push through the kind of far-reaching changes to the economy needed to restore growth and reduce Italy’s crippling burden of public debt.