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OECD warns that family income has dropped dramatically

Agency praises reforms to Italy's social security, labour market

18 March, 14:10
OECD warns that family income has dropped dramatically (Updates previous) (ANSA) - Rome, March 18 - The average Italian family saw its income drop by 2,400 euros between 2007 and 2012 - more than double the eurozone average of 1,100 euros, the Organisation for Economic Co-operation and Development (OECD) said Tuesday.

It blamed a "deteriorating labour market, especially for youth" as well as a "weak level of protection" for workers as contributing to income weakness.

But the Paris-based organization also praised Italy's "recent labor-market reforms" and an extension of social-security programs as "important steps in the right direction". Both marked important turning points away from Italy's "poorly prepared social-security system" which it said contributed to rising poverty and unemployment.

Both the former government of ex-premier Mario Monti and the new administration of Premier Matteo Renzi proposed changes that they said would make it easier for employers to hire.

Last week the OECD, whose former chief economist Pier Carlo Padoan recently became Italy's economy minister, warned that although economic growth in the first quarter of this year will be relatively positive, providing further evidence that Italy is emerging from a bitter recession, the second quarter of 2014 still looks weak.

It said then that Italy's gross domestic product (GDP) will show growth of 0.7% between January and March of this year but that the expansion won't be easy or direct as in the second quarter of this year, economic growth will stall, likely showing just 0.1% expansion between April and June.

In Tuesday's statement, the OECD said that in 2011, 13.2% of Italians said they could not afford to buy enough food, compared to 9.5% in 2007, and 7.2% had been unable to afford some medical care for economic reasons.