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Padoan warns that unemployment is 'Number One threat'

Economy minister says unconventional policies good idea at ECB

08 April, 13:30
Padoan warns that unemployment is 'Number One threat' (ANSA) - Rome, April 8 - The greatest threat now facing Europe is "high and persistent unemployment," which is also an obstacle to reform in Italy, Economy Minister Pier Carlo Padoan said Tuesday.

But Premier Matteo Renzi's government is working hard on labour market reforms in Italy in what has been dubbed the Jobs Act.

"We need to combine policies to stimulate demand and facilitate (reform) of the labor market, such as the Jobs Act," he said in an interview with CNN. Unemployment overall in Italy reached 13% in February, the highest rate in 37 years, while the jobless rate for young people between 15 and 24 years of age hit 42.3%.

Youth unemployment is also a serious problem across Europe and has contributed to frustration and unrest, and is a factor in the rise of euroskeptic parties in the campaign towards European parliamentary elections in late May.

Meanwhile, Padoan also endorsed comments made last week by Mario Draghi, the president of the Europrean Central Bank, who said that the ECB stood ready to use whatever tools it had in its tool kit to control price pressures.

That could include unconventional measures, such as large purchases of government bonds, similar to what other central banks have done including the United States Federal Reserve.

The Fed has dubbed the practice "quantitative easing" and the ECB is wise to consider it, said Padoan.

"Yes, quantitative easing would be appropriate for the eurozone," said Padoan. Parts of Renzi's controversial Jobs Act arrived in the Senate late last week for debate.

The overall package aims to streamline labour regulations and reduce the current plethora of different job contracts and benefits available.