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Renzi's Jobs Act takes centre stage of political debate

New PD leader seen as trying to set govt agenda

09 January, 14:25
Renzi's Jobs Act takes centre stage of political debate (ANSA) - Rome, January 9 - A proposal for a package of measures to combat unemployment presented by Matteo Renzi, new leader of Italy's centre-left Democratic Party (PD), has taken centre stage on the Italian political arena and may up pressure on Premier Enrico Letta.

Renzi launched the proposals after national statistics agency Istat said Wednesday that unemployment reached a record high of 12.7% in November, with over 41% of under-25s out of work.

But the move has been interpreted by some as part of an attempt by Renzi to dictate the agenda of the executive after he won the leadership of the PD, the biggest group in parliament, with a landslide victory in a primary last month.

Letta, also a PD member, is currently holding talks with all the parties supporting his left-right coalition government for a policy pact for this year. He may meet Renzi later on Thursday.

The aim of the pact is to avoid the instability that has dogged Letta's coalition government for much of the time since it was sworn in in April after a long deadlock followed February's inconclusive general election. But some political pundits say the ambitions of Renzi, who has repeatedly called on the government to speed up on institutional and structural economic reforms, may present a new threat to the administration's solidity.

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.

on Thursday Renzi played down suggestions he was trying to dictate policy, after saying Wednesday that his Jobs Act would be in force within eight months, stressing that was only a draft that would be discussed at a party meeting on January 16.

He added via his Twitter account that he welcomed "ideas, criticisms and comments". 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.

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 Italy's biggest trade union, the left-wing 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.

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 our of work.

The Job Act also proposed 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.