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OECD urges Italy to cut labour costs to boost growth

Protect wages, not jobs says Paris-based organisation

21 February, 12:17
OECD urges Italy to cut labour costs to boost growth (ANSA) - Rome, February 21 - The Organisation for Economic Cooperation and Development on Friday urged Italy's incoming government to lower labour costs to help generate growth in an economy showing timid signs of emerging form its longest postwar recession.

Matteo Renzi's government should change the focus of labour policy by providing stronger safeguards for workers' wages and less for the job per se," as well as "improving the social safety net", the OECD said.

In its Going for Growth report, the OECD said Renzi should reduce the so-called 'fiscal wedge' - the difference between what employers pay in labour taxes and what workers get - as well as cutting minimum labour costs.

Italy's slow growth may have become a structural problem, added the Paris-based organisation. The recommendation broadly reflect Renzi's economic programme.