Italy needs to come up with a
different kind of job flexibility, because current policy has
been counterproductive, central bank governor Ignazio Visco said
Tuesday at an Ecofin meeting of EU finance ministers in the
Greek capital.
''We have pursued a flexibility that has not been useful,
that has been exploited by companies to reduce labor costs while
putting off innovation'', the governor said.
Italy first introduced flexible labour contracts in 1997,
extending it in 2003 with the so-called Biagi law allowing
various types of non-permanent contracts.
''We need to pursue a different flexibility, one that
couples employer interests with those who need and want an
education'', Visco said.
His comments came as new data from the national statistics
bureau showed unemployment in Italy rose to 13% in February, the
highest level in about 37 years, with youth unemployment hitting
42.3%.
Visco went on to say he is confident Italy's banks are in
good shape ahead of forthcoming EU-wide stress tests.
The aim is to assess banks' resilience to adverse market
developments over a period of three years (2014-2016).
The methodologies and scenarios for the tests are
expected to be published sometime in April, with banks'
individual results to be released at the end of October,
according to the European Banking Authority (EBA).
''Italian banks have gotten busy cleaning up their act in
view of the stress tests'', Visco said, adding that Italy's
financial institutions have recapitalized to a great degree and
''by their own means''.
''Obviously their profitability is low, but the potential
is there given the way these banks have managed to attract
funds. This shows trust in their ability to weather the
crisis'', the governor explained.
''Italy's banking system has faced up to the crisis with
very little cash, less than any other European country'', he
added.
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