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Renzi's Jobs Act gets warm reception

EU sees as move in right direction, unions give cautious backing

09 January, 17:27
Renzi's Jobs Act gets warm reception (By Paul Virgo) (ANSA) - Rome, January 9 - A package of measures to combat unemployment proposed by Matteo Renzi, the new leader of Italy's centre-left Democratic Party (PD), won a largely warm reception on Thursday. Renzi launched the proposals after national statistics agency Istat said Wednesday that unemployment in Italy reached a record high of 12.7% in November, with over 41% of under-25s out of work.

They come while Premier Enrico Letta, also a PD member, is holding talks with all the parties supporting his left-right coalition government for a policy pact for this year. He is expected to meet Renzi this week.

One of the main aims of Renzi's Job Act would be to simplify Italy's labour system, eliminating many parts of the current myriad of work contracts and lay-off benefits.

A key proposal is to have single employment contract with job protection measures growing with seniority. As things are, older workers with regular contracts tend to enjoy extremely high levels of job protection, while young people are often forced to accept temporary contracts or other forms of freelance employment that guarantee them few rights and little job security.

The current system has been blamed for making firms reluctant to hire, as it is so hard for them to dismiss workers once they are on the books, and contributing to the high levels of joblessness, especially among the young.

European Employment Commissioner Laszlo Andor said Thursday the proposals seem "to go in the direction hoped for by the EU in recent years". This involves "making the job market more dynamic and inclusive by tackling the sensitive issues of youth unemployment and the employment of women," said Andor. The situation in Italy is compounded by "the excessive segmentation of the job market" and the "generational gap between people affected by unemployment", he added.

The unions also gave cautious backing.

"We can only welcome the fact that current debate is at last centred on labour and the fact that the biggest centre-left party is committed to making proposals," said Susanna Camusso, leader of Italy's largest trade union confederation, the left-wing CGIL. She welcomed in particular the proposal to limit the number of possible job contracts, describing it as "an absolutely unexpected new development: until today we were the only ones saying this". The fact that Camusso did not blast the proposals is significant.

The emergency technocrat administration of Letta's predecessor, Mario Monti, was forced to water down reforms to make it easier for firms to dismiss staff following opposition from CGIL and then PD leader Pier Luigi Bersani. The main point of contention was whether to change Article 18 of the 1970 Workers Statue, a law that forbids companies with over 15 employees from firing people without just cause.

Camusso stressed, however, that "we would have liked to see greater ambition, starting, for example, with the creation of jobs or resources". Her counterpart at the more moderate CISL trade union, Raffaele Bonanni, said the measures needed discussing, but added that he was "basically in favour". The union secretary added that he "liked the idea of giving force to a single job contract and eliminating all those 'decoy contracts' that serve only to pay people less, especially young people".

The government itself was not overly enthusiastic, with Labour Minister Enrico Giovannini pointing out that the measures "require sizeable investment".

In exchange for the easing of hiring and firing rules, Renzi has proposed beefing up unemployment benefits and making them available to more people who are out of work.

The Jobs Act also proposes cutting bureaucracy for employers, eliminating the obligation for firms to register with the local chamber of commerce, among other things.

The package envisages 10% cuts in energy costs for companies, breaks on labour taxes and higher taxes on financial earnings too. On Thursday Renzi played down suggestions he was trying to dictate policy to the government, after saying Wednesday that his Jobs Act would be in force within eight months.

He stressing that his proposals were only contained in a draft document that would be discussed at a party meeting on January 16.

He added via his Twitter account that he welcomed "ideas, criticisms and comments". Nevertheless, the move has been interpreted by some as part of an attempt by Renzi to move the government in the direction he wants after winning leadership of the PD, the biggest group in parliament, with a landslide victory in a primary last month.

Renzi, the telegenic 38-year-old mayor of Florence who has been compared to the young Tony Blair, is not currently part of the government, but has made no secret of the fact that he one day wants to become premier. He has stressed though that he wants to head the government after winning elections, not thanks to an agreement between parties like the one that saw Letta become premier.