Decisive week for Monti’s labour reforms in Italy

Italy’s Prime Minister Mario Monti will make a last ditch attempt to reconcile employers and trade unions to his labour reforms this week as he fights to maintain momentum on his plan to galvanise Italy.

The former eurocrat will meet with union representatives today in the hope of persuading them to back his project by the end of the week, despite fierce resistance to his plans for greater flexibility in the labour market.

Since he came to power in November amid a financial crisis in the country, Prof. Monti has insisted that the reforms – aimed at increasing growth and bringing down soaring unemployment figures – are a crucial priority for the government.

While unemployment in Italy is below average for the eurozone – at 9.2 per cent – the job rate is 57 per cent, making it among the weakest in Europe, largely due to a pervasive black market and a lower working quota among women.

Prof. Monti’s aim is to make it easier to fire workers by amending the contentious article 18 of the labour statute.

Adopted in 1970, it makes it more difficult to fire workers and obliges firms to re-instate those wrongfully dismissed and pay any lost salary.

“The future of the country is at stake with this article,” Prof. Monti said this weekend after meeting with European Commission head Jose Manuel Barroso, who added: “Labour reform in Italy is essential and has to be bold and global.”

In an attempt to tackle youth unemployment – which stands at over 31 per cent – and the precar-ious position of young people and women in the labour market, the government hopes to persuade firms to hire people on regular contracts.

Priorities would include investing in apprentice schemes and creating a universal unemployment benefit plan for all workers.

Critics say the reforms will increase unemployment, and while some observers have praised Prof. Monti for saving Italy from economic meltdown, others question whether he can reverse the long-standing pattern of high debt and low growth.