Berlusconi promises ‘hire and fire’ reforms

By Tom Gill

After stormy discussions with coalition partners, the Italian premier SIlvio Berlusconi has made a number of promises to Eurozone country leaders that are designed to cut the Italian debt, partly through spending cuts and partly through measures that will supposedly boost growth.

These include new attacks on working people:

• New legislation that will make it easier to fire workers on permanent contracts for “economic reasons”, and specific measures aimed at weakening employment rights of public sector workers

• An acceleration of plans to raise the retirement age from 65 to 67

Italy’s biggest trade union, CGIL, has pledged to fight the proposals.

Susanna Camusso, secretary of the powerful CGIL union, called on the other two main union federations to close ranks against the plan.

“We’re ready to propose unified action,” Camusso said in an interview with the liberal La Repubblica daily, describing the reforms as a combination of “targeted attacks” on Italian workers.

“You can also just say No,” to the European Central Bank, added Camusso who predicted that the “government will not have the strength to introduce the measures.”

Paolo Ferrero, secretary of Communist Refoundation, said the government’s “choice to promote sackings was simply using the crisis to favour the bosses. Giving the green light to firing workers has nothing to do with the battle against speculation or the reduction the the deficit.”

The moves to make the Italian jobs market more “flexible” are supposed to boost Italy’s stagnant economy, but they are destined to fail, according to economist Emiliano Brancaccio, interviewed today in Liberazione.

It’s all about cutting labour costs, Brancaccio said, but he added between 1998 and 2008 Italy cut labour costs drastically through measures to make it easier and cheaper to “hire and fire”.

The thing is, Germany has been doing exactly the same. “Over the past decade Germany wages have not risen at all in real terms. We can make all the sacrifies we want but if Germany doesn’t stop its policy of wage deflation it will be waste of time,” Brancaccio told the communist daily newspaper.

The proposals, contained in a “letter of intent” taken to the Eurozone summit and agreed on Wednesday night, need to ensure the budget is balanced by 2013.

Also included in the letter are long promised plans to open up closed professions, cut red tape and raise revenue through steps such as privatisations and a new wealth tax.

Pundits don’t believe Berlusconi can last beyond January and elections are expected in spring, a year ahead of schedule.

Berlusconi has until now repeatedly said he expects to serve out his term until 2013. But media reports suggest pressure from abroad for action on Italy debt, second only to Greece’s as a proportion of GDP, and the refusal by coalition partner Northern League to play ball, means he might give up the ghost sooner.

If they can’t hold their coalition together until the end of the year Italian President Napolitano might appoint a stop-gap government of ‘technocrats’ to pass the neo-liberal reforms demanded by Paris, Berlin and Brussels.

The billionaire media magnate hopes a delay would enable him control the way the crisis plays out ahead of elections in the Spring.