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Renzi 'shocked' as Italy's jobless rate hits 13%

Italy's youth jobless rate hits 42.3% in February

01 April, 16:32
Renzi 'shocked' as Italy's jobless rate hits 13% (By Sandra Cordon) (ANSA) - Rome, April 1 - New figures that showed unemployment in Italy rose to 13% in February, the highest level in about 37 years by some measures, were "shocking", Premier Matteo Renzi said Tuesday.

National statistical agency Istat also reported that unemployment among youths aged 15 to 24 in Italy rose to 42.3% in February when measured on an annualized basis. The figures provide further evidence of the deep and lingering impact of the country's worst recession since the Second World War. More than 3.3 million Italians were without jobs in February, the highest level since the agency began its current method of tracking the jobless rate on a quarterly basis in 1977, Istat said. The same report showed that the youth jobless rate was about 3.6 percentage points above the level recorded at the same time last year when unemployment was estimated to be above 38.5%, but down slightly from January's jobless rate.

On an official visit to London, Renzi called the unemployment report "shocking" and said the statistics indicate that the economic recovery is still "not sufficient". Officially, Italy's recession ended late last year, but the recovery has been very weak and since taking power in late February, Renzi set himself a deadline of 100 days to win support from his coalition government to implement measures aimed at boosting growth and creating jobs. Renzi's government has said it is making the unemployment crisis a top priority, to be dealt with via controversial labour-market reform proposals that aim to simplify labour regulations and reduce the current plethora of different contracts and benefits available. In London, Renzi said his plans must be implemented because Italy has "wasted too much time in recent years, now we have to get running".

Italy has 2,100 regulations dealing with employment and his plan is to dramatically cut those to "50 or 60 regulations to give rules and certain time frames, written in English, too, for investors".

Renzi pledged that his economic reforms will bring Italy's jobless rate down to a single-digit figure. "You will see that in the coming months, it will be back under the double (digit) figure," he said.

More broadly, Renzi has pledged a series of tax cuts and social spending to try to stimulate growth in an economy where gross domestic product (GDP) dropped by 1.9% in 2013 and is widely forecast to grow by only about 0.6% this year.

That includes tax cuts of 10 billion euros for lower-income Italians and 65 billion euros in repayments of outstanding bills that the government owes to businesses. As well, he has been pushing through Constitutional changes to strip Italy's Senate of much of its law-making powers and eliminating provincial governments in order to make the country more easy and less expensive on govern.

On Monday, cabinet approved those measures which may still take a year to move through Parliament and Renzi said they could ultimately save the country one billion euros. Renzi has good reasons for haste, given that Italy's economy has been weak since the global economic crisis that began in 2007, and since then it has been hit hard by two recessions.

The outlook from experts for the next few years suggests continued weakness.

The European Commission has reduced its forecast for GDP growth this year to 0.6% and warned the joblessness won't improve until 2015.

Similarly, the International Monetary Fund in a preliminary report also predicted 0.6% GDP growth this year, rising to 1.1% in 2015, while it said unemployment could drop to 12.4% later this year and 11.9% in 2105 All of this is weighing on consumer confidence, an important factor in economic growth that is strongly influenced by the jobs market and the outlook for employment. Consumers may not be heartened by the fact that Italy's employment rate is estimated at about 55.2%, a decrease of about 0.8 percentage points compared to twelve months earlier. Italy is not alone in struggling with a staggeringly high youth unemployment rate.

The United Nations reported last week that worldwide, at least 74.5 million people under 25 are jobless, demonstrating that Italy's high rate of youth unemployment is part of a global phenomenon that the UN warns threatens an entire generation.